[Asia Economy Reporter Kangwook Cho] This year's key themes for personnel changes in the financial sector can be summarized as 'stability, digital, and slim.' The prolonged COVID-19 pandemic has accelerated digital innovation due to the spread of untact (contactless) trends. In particular, amid ongoing uncertain domestic and international environments, the focus has been on stability by supporting the continuation and reappointment of existing management rather than change. Additionally, it is analyzed that management strategies were established to maximize efficiency through organizational slimming.
According to the financial sector on the 25th, among major domestic financial holding companies, KB, Shinhan, and Woori Financial Group have completed their year-end personnel changes.
Shinhan Financial Group, which made personnel changes first on the 17th, supported group management stability by recommending the reappointment of most CEOs of its major subsidiaries. It decided to retain the CEOs of 11 out of 14 affiliates.
In particular, the group recommended reappointment with a new two-year term for the CEOs of its core subsidiaries: Jin Ok-dong, President of Shinhan Bank; Lim Young-jin, President of Shinhan Card; and Sung Dae-gyu, President of Shinhan Life Insurance. These CEOs were given the opportunity to enhance their ability to respond to the difficult management environment each company faces, discover new business opportunities with a longer-term perspective, and lead innovation.
A Shinhan Financial Group official said, "CEO terms are usually operated as two years for new appointments and one year for reappointments, which tended to focus on short-term performance rather than mid- to long-term strategy implementation," adding, "If terms are flexibly operated between one and two years, CEOs will have sufficient time to demonstrate leadership, strengthening responsibility management centered on subsidiary CEOs."
KB Financial Group also confirmed the reappointment of CEOs in seven out of ten affiliates. KB Securities, KB Kookmin Card, KB Capital, KB Life Insurance, KB Savings Bank, KB Investment each continue under the leadership of Park Jung-rim, Kim Sung-hyun (co-CEOs), Lee Dong-cheol, Hwang Soo-nam, Heo Jung-soo, Shin Hong-seop, and Kim Jong-pil, respectively, all with one-year terms.
With the three-term reappointments of KB Financial Chairman Yoon Jong-kyu and Kookmin Bank President Heo In already confirmed, this is interpreted as a measure to secure synergy among affiliates and ensure stable management. The urgency of management stability due to the spread of COVID-19 also appears to have influenced this decision.
Notably, KB Financial reinstated the position of Vice Chairman of the holding company for the first time in 10 years since 2010 as part of stabilizing the group's governance structure. Yang Jong-hee, CEO of KB Insurance, was appointed as Vice Chairman with a one-year term.
NH Nonghyup Financial nominated Son Byung-hwan, President of Nonghyup Bank, as the sole candidate for chairman. This move is seen as an effort to stabilize the organization by promoting the existing bank president to chairman, breaking away from the 'bureaucratic' image and 'conservatism' amid 'gwanpia' (government-bureaucrat) controversies.
In the case of Woori Financial Group, except for one of the four affiliate CEOs whose terms expire at the end of this month, all others were replaced. Kim Jung-gi, current Vice President of Business Management Division at Woori Financial Group, was recommended as the next CEO candidate for Woori Card; Park Kyung-hoon, current Vice President of Finance Division, as the next CEO candidate for Aju Capital; and Kim Sung-jong, current IT Group Head at Woori Bank, as the next CEO candidate for Woori FIS. Choi Kwang-hae, CEO of Woori Financial Research Institute, was reappointed.
The key issue is whether Kwon Kwang-seok, President of Woori Bank, will be reappointed. President Kwon, who took office earlier this year with a 'one-year term,' has a term until March next year. The industry expects that, like other financial holding companies pursuing stability, President Kwon's reappointment is likely.
This year's personnel changes in the financial sector are also closely related to the digital innovation challenges faced by each financial company.
In particular, Son, nominated as NH Nonghyup Financial chairman candidate, efficiently promoted digital transformation while managing Nonghyup Bank by operating five agile organizations with eight cells, including the All One Bank Center Cell. He also established a dedicated AI (Artificial Intelligence) team alongside the data business division. A non-face-to-face personal financial management (PFM) service was also launched. Furthermore, he built an industry-centered green finance ecosystem, including the Nonghyup Financial ESG (Environmental, Social, and Governance) model.
Jin Ok-dong, President of Shinhan Bank, accelerated digital transformation (DT), elevating Shinhan SOL to the top digital platform among commercial banks. He was recommended for reappointment in recognition of his achievements in launching the Digital Innovation Team and promoting innovative new businesses beyond traditional banking.
Lim Young-jin, President of Shinhan Card, was recognized for his outstanding performance in leading DT in the card industry by focusing personnel and resources on future core businesses such as MyData and MyPayment.
Lee Dong-cheol, President of KB Kookmin Card, who succeeded in his third term, also led digital innovation by investing 100 billion KRW over two years to build a next-generation IT system and launching the simple payment platform 'KB Pay.'
Earlier in September, Yoon Jong-kyu, Chairman of KB Financial, who succeeded in his third term, identified global and digital as the core keywords of his third-term management vision. Chairman Yoon proposed providing 'comprehensive financial services' to secure a competitive edge in the digital sector.
Another key theme in personnel changes is pursuing management efficiency through organizational slimming.
Shinhan Financial reduced its management position system from three levels?Vice President, Deputy Vice President, and Managing Director?to two levels?Vice President and Managing Director?establishing institutional measures to enable vice president-level executives to practice responsibility management in each division.
Additionally, the group's management division integrated and streamlined the holding company's management functions, which were scattered across teams such as strategy and finance. In particular, a platform was established to share key management issues of the group and subsidiaries with compliance support and audit departments on an ongoing basis, strengthening pre- and post-monitoring and establishing processes to ensure thorough financial consumer protection.
Woori Financial Group also conducted organizational restructuring and executive personnel changes emphasizing slimming the holding company and bank organizations.
The current '7 divisions - 2 levels - 5 general managers' system was slimmed down to '8 divisions - 2 levels,' reducing four executive organizations and consolidating departments to cut five units. To improve efficiency in managing the group's key businesses, the asset management, global, and CIB business divisions were abolished, with their functions integrated into the business growth division.
Woori Bank also pursued 'organizational slimming' by reducing three business groups and cutting the number of executives (excluding the president and standing audit committee members) from 23 to 20.
Hana Financial Group plans to finalize the next chairman candidate following the expiration of Chairman Kim Jung-tae's term in March next year, then select final CEO candidates for affiliates through the Group Executive Candidate Recommendation Committee. It is expected that CEO appointments for major affiliates will be made through the Executive Recommendation Committee in January and the Personnel Recommendation Committee in February next year.
Hana Bank President Ji Sung-kyu and Hana Financial Investment President Lee Jin-guk's terms expire in March next year. Since other financial holding companies have chosen to reappoint affiliate CEOs to prepare for the prolonged COVID-19 pandemic, it is anticipated that Hana Financial will also opt for 'stability.'
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