Has the "Bangtan Ceiling" Been Broken?... Glass Ceiling Persists in Financial Firms Despite ESG Management Trend (Comprehensive)

At the End of Last Year, Women Executives at 4 Major Banks Accounted for 6.8%
Regional Banks Only 3.3% During the Same Period
Increasing Female Representation in ESG Evaluation Models

[Asia Economy Reporter Song Seung-seop] Despite policies to attract female talent, the proportion of female executives varies greatly across financial sectors. As ESG (Environmental, Social, and Governance) management gains prominence, the share of female executives has become an important indicator, yet the glass ceiling in financial companies remains firmly in place.

According to the Financial Supervisory Service's electronic disclosure system as of the end of last year, among 117 executives at the four major banks (KB Kookmin, Shinhan, Hana, and Woori Bank), only 8 (6.83%) were women. Of the 33 registered executives, only 2 were women, and among the 84 unregistered executives, there were only 6 women. Notably, Shinhan Bank and Woori Bank had zero female registered executives, and Woori Bank also had zero female unregistered executives.

The glass ceiling was even more severe at regional banks. Among 120 executives at the six regional banks (Gwangju, Jeonbuk, Busan, Gyeongnam, Daegu, and Jeju), only 4 women (3.33%) held executive positions at the end of last year. Female unregistered executives numbered just 3 (3.84%), with Gwangju Bank, Jeonbuk Bank, and Jeju Bank having exclusively male executives. In terms of registered executives, Jeju Bank was the only one to have a female outside director, Jung Soon-yeo. This slow pace of change compared to other financial sectors is a key reason for criticism.

The importance of female executives is increasingly recognized. As ESG management becomes a trend in the financial sector, having more female executives can lead to higher scores in the S (Social) and G (Governance) categories. Evaluation agencies assign different weightings but award points for efforts toward gender equality. Since the Korean Corporate Governance Service (KCGS) had previously excluded the female executive ratio from its ESG evaluation model, there is growing advocacy to include female-related indicators as part of the ‘S’ evaluation factors.

Female Executive Indicators Gain Importance... Financial Companies Say "Immediate Change Is Difficult"

Legislative efforts to guarantee a minimum number of female executives are also underway in the political arena. In January last year, the National Assembly passed an amendment to the Capital Market Act requiring listed companies to have at least one female director on their boards. According to the amendment, from August next year, publicly listed companies with assets exceeding 2 trillion won cannot compose their boards entirely of one gender.

Nonetheless, financial companies argue that immediate changes are difficult due to unavoidable circumstances. A banking industry official explained, “Financial companies today do not discriminate against women in executive promotions,” adding, “However, it is true that due to past social atmospheres and organizational cultures, there are currently few women considered for executive positions.” In response to criticisms that men are mainly assigned to departments conducive to building performance such as corporate loans, the official stated, “There is a gap with the current atmosphere, but the proportion of women will gradually increase in the long term.”

This explanation contrasts with the active appointment of female executives by domestic foreign banks. Foreign banks SC First Bank and Citibank have a total of 47 executives, with women accounting for 25.53% (12 executives). Among 12 registered executives, 33.33% (4 executives) are women.

Citibank is led by Yoo Myung-soon, the first female bank president in Korea. Alongside outside director Lee Hyun-hyun on the board, SC First Bank recently appointed Yang Jeong-won as Executive Director of Transaction Banking last month, increasing the number of female executives from 6 to 7. The proportion of female branch managers and department heads is also reported to be about one-quarter of the total.

An official from a foreign bank emphasized, “Foreign banks do not give special bonus points to women when appointing executives,” but added, “Their internal development systems have been well established for a long time.”