New Outside Directors at Securities Firms... Professors and Former Officials Sweep Positions

Top 22 Securities Firms Appoint 17 New Executives, Including 7 Professors and 6 Bureaucrats

[Asia Economy Reporter Park Ji-hwan] The securities industry, which concluded shareholder meetings en masse last month, has filled its new outside director positions largely with former government officials and current professors. While the high proportion of professors appointed remains unchanged from last year, this year stands out for the significant number of former government officials occupying outside director seats at securities firms.

According to the financial investment industry on the 5th, among the 17 newly appointed outside directors at the top 22 securities firms by equity capital this year, 7 (41.2%) were professors, making them the largest group. Following them were 6 (35.3%) former government officials, and 4 (23.5%) industry experts such as business executives and accounting firm professionals.

This differs from last year, when most newly appointed outside directors were professors and active financial experts. Among the 23 newly appointed outside directors last year, only 3 (13.0%) were former government officials. Meritz Securities appointed Kim Seok-jin, a former Financial Supervisory Service official, as an outside director, while Daishin Securities selected Cho Hong-hee, a former head of the Seoul Regional Tax Office and currently an advisor at the law firm Bae, Kim & Lee, as an outside director. Shinhan Investment Corp. appointed Choi Sang-mok, who served as the 1st Vice Minister of Strategy and Finance, as an outside director.

This year, a large number of former government officials have appeared as outside directors in the securities industry. With the enactment of the Financial Consumer Protection Act last month, which strengthened consumer protection responsibilities, it is believed that former government officials will play a significant supportive role in dealing with authorities in matters such as compensation for damages, dispute resolution, and litigation processes.

Samsung Securities newly appointed former Financial Services Commission Chairman Lim Jong-ryong as an outside director. Lim previously served as the 1st Vice Minister of Strategy and Finance, chairman of NH Nonghyup Financial Group, and the 5th Financial Services Commission Chairman. Hyundai Motor Securities appointed former Financial Supervisory Service Director Yoon Seok-nam, and Hana Financial Investment appointed former Ministry of Government Legislation Director Nam Ki-myung as outside directors. Kiwoom Securities recruited former Deputy Chief Prosecutor of Gwangju High Prosecutors' Office Lee Seok-hwan, and Eugene Securities brought in former Seoul Family Court Judge Kim Yong-dae. KTB Investment & Securities appointed Lee Hyuk, a former prosecutor with experience as a legal advisor dispatched to the Financial Supervisory Commission and currently CEO of Lee & Lee Law Firm, as an outside director. Although not an outside director, KB Securities recommended former Financial Supervisory Service Deputy Director Min Byung-hyun as a new audit committee candidate.

The appointment of experts in finance and accounting is also notable. From this year, the separate election of audit committee members has been mandated, and under the Commercial Act, at least one audit committee member must be an expert in finance or accounting. Meritz Securities and Daishin Securities newly appointed Professor Lee Sang-chul of Dongguk University’s Department of Accounting and Professor Won Yoon-hee of the Graduate School of Taxation at the University of Seoul, respectively, to their outside director boards. Kiwoom Securities also included Associate Professor Choi Sun-hwa of Seoul National University’s Business School on its outside director board. Hi Investment & Securities selected Son Won-jo, currently the head of Daekyung Accounting Corporation and a member of the Gyeongsangbuk-do Local Tax Deliberation Committee, as an outside director.

Although their proportion is smaller than in previous years, individuals with diverse experience in the financial sector have also appeared. Korea Investment & Securities recruited Ham Chun-seung, president of PH&Company who has worked at Citigroup Global Markets Securities and ING Bearing Securities Seoul Branch, as an outside director.