IBK appoints two outside directors... Union-recommended director plan fails

Appointment of Professors Kim Jeong-hoon and Jeong So-min

[Asia Economy Reporter Park Sun-mi] The introduction of the union-recommended director system at IBK Industrial Bank of Korea has been scrapped.

According to the financial sector on the 9th, the Financial Services Commission appointed Kim Jeong-hoon, adjunct professor at Dankook University Graduate School of Public Administration and Welfare, and Jeong So-min, professor at Hanyang University Law School, as outside directors of Industrial Bank of Korea for a three-year term. Both are individuals recommended by the management side. Although this is the second time the IBK union has recommended outside directors since March 2019, the introduction of the union-recommended director system was ultimately abandoned.

Born in 1958, Professor Kim is currently serving as an adjunct professor in the Department of Legal Administration at Dankook University Graduate School of Public Administration and Welfare. He has held positions such as General Affairs Manager, Training Operations Manager, and Audit Office Chief at the Korea Institute of Finance. He was previously appointed as an outside director of Industrial Bank of Korea in February 2018 and completed a three-year term.

Born in 1971, Professor Jeong has been a professor at Hanyang University Law School since 2017. He has served as an interpretation committee member of the Ministry of Government Legislation's Legal Interpretation Review Committee and as a member of the Broadcasting Dispute Mediation Committee of the Korea Communications Commission. In 2019, he was appointed as a member of the Financial Development Review Committee of the Financial Services Commission.

Amid growing concerns about President Moon Jae-in's "lame duck" (power loss at the end of term) following the April 7 by-elections, labor participation in management within the financial sector is progressing slowly.

The introduction of the labor director system, which guarantees labor union participation on the board of directors, is one of President Moon's key election pledges. However, even the union-recommended director system, considered a preliminary step to the labor director system, has yet to take off in the financial sector. Only the worker board observer system, which has a lower barrier, is currently in its infancy, mainly among financial public enterprises.

The worker board observer system guarantees that worker representatives can observe board meetings. Although they do not have voting rights, worker representatives can review agenda items and related materials presented to the board and have the right to speak.

Currently, the Korea Deposit Insurance Corporation is in discussions between labor and management aiming to introduce the worker board observer system within the first half of the year. If the KDIC implements this system, it will be the third case in the financial sector following the Export-Import Bank of Korea in 2001 and the Korea Housing Finance Corporation in February this year. A financial sector official said, "Last year, various attempts were made centered on labor unions in financial public enterprises and private financial companies to guarantee labor participation in management, but they ultimately failed," adding, "If the union-recommended director system does not open the way in financial public enterprises and policy banks, it will be even more difficult to spread to private financial companies."