ESG Management Focus... Banking Sector Launches Initiatives to Develop Female Executives (Comprehensive)

Only 5.3% Female Executives at 4 Major Banks
Amid ESG Management Focus... Launch of 'Women Leader Development' Program

[Asia Economy Reporter Kim Jin-ho] As ESG (Environmental, Social, and Governance) emerges as the biggest issue in corporate management, major domestic financial companies have launched company-wide programs to cultivate ‘female leaders.’ Attention is focused on whether these efforts to break the entrenched ‘glass ceiling’ in the financial sector (an invisible barrier preventing women from advancing to senior positions) will lead to tangible results.

According to the quarterly reports filed on the Financial Supervisory Service’s electronic disclosure system on the 24th, the proportion of female executives at the four major commercial banks?KB Kookmin, Shinhan, Hana, and Woori Bank?is only 5.3%. This clearly shows that despite emphasizing the development of female senior talent and gender equality as important tasks in recent years, the glass ceiling remains firmly in place.

However, as ESG management has risen as a survival value for companies, major financial firms are actively pursuing mid- to long-term strategies to foster female executives. Woori Bank recently selected 60 employees to participate in the first cohort of its female leadership enhancement program, ‘Woori Wing.’ The program aims to help female talents take initiative, interact with colleagues, and grow. The selected participants come from various ranks, ranging from managers to department heads (branch managers). They plan to strengthen their leadership skills through group coaching and expert lectures conducted by leadership specialists. A Woori Bank official expressed expectations that “having a rich talent pool through the female leader development program will maximize organizational productivity and competitiveness.”

Hana Financial Group also launched its next-generation female leader development program, ‘Hana Waves,’ in mid-April. Thirty-four female deputy branch managers within the group were selected based on recommendations from CEOs of affiliated companies.

Shinhan Financial Group has been operating the ‘Shinhan She-roes’ program since 2018. Recently, 44 participants for the fourth cohort were selected and are undergoing six months of training. Through group mentoring sessions involving various external experts in organizational management, business execution, and communication, they are expected to emerge as future female leaders. KB Financial Group is also running a female leadership enhancement program and aims to secure 20% female executives by 2023.

ESG as a Key Issue, Growing Awareness of the Need to Develop Female Talent

The major financial companies’ active efforts to cultivate female executives are analyzed as measures reflecting the ‘G (Governance)’ aspect of ESG management. The higher the proportion of female executives, the better the ESG evaluation scores a company can receive. With ESG management emerging as the top priority, companies seem to have recognized the necessity of developing female talent from a mid- to long-term perspective.

There is also an aim to actively respond to the global trend toward gender equality efforts. BlackRock, the world’s largest asset management firm, has announced a policy not to invest in companies with fewer than two female executives. Additionally, Nasdaq, the U.S. over-the-counter stock market, plans to prohibit listing companies without female executives and is considering delisting companies that do not comply.

A financial industry insider said, “Securing diversity among executives, including female executives, is cited as an essential factor for the future development of the financial industry,” adding, “We expect various female talent development programs to continue emerging.”

Meanwhile, according to the amended Capital Markets Act scheduled to take effect in August next year, listed companies with total assets exceeding 2 trillion won must not compose their boards of directors solely of one gender. Accordingly, it is expected that most financial companies will include at least one female executive on their boards.