Sooeun Initiates Outside Director Appointment Process... Attention on Introduction of 'Labor Union Recommended Director System' (Comprehensive)

Verification Begins for 4 Labor-Management Nominees
Expected to Conclude by Next Month at the Earliest

[Asia Economy Reporter Jin-ho Kim] The Export-Import Bank of Korea (KEXIM) has officially begun the process of appointing a non-standing director. This comes two months after the retirement of former non-standing director Namyeonghyun. KEXIM and its labor union have each recommended two candidates, and reputation checks on these candidates are currently underway. Attention is focused on whether the bank can successfully introduce the 'Union-Recommended Director System,' a first in the financial sector.

According to financial circles on the 28th, KEXIM recently held a board meeting to complete the formation of the Director Candidate Recommendation Committee (DCRC) for recommending non-standing director candidates. The appointment process for KEXIM’s non-standing directors involves the DCRC → President’s proposal → appointment by the Minister of Strategy and Finance.

It is unusual that the KEXIM board has been vacant for nearly two months. Previously, KEXIM had minimized vacancies by forming the DCRC in advance as the term of non-standing directors approached expiration. However, in this case, the labor union’s strong insistence on introducing the 'Union-Recommended Director System' significantly delayed the appointment process.

In particular, rumors circulated that the Blue House had designated a university professor, formerly a Blue House secretary, as the successor to former non-standing director Nam, causing all procedures to be halted for over a month. Subsequently, management and the union engaged in lengthy negotiations over the formation of the DCRC and candidate recommendation procedures, recently reaching an agreement to resume the process.

The KEXIM DCRC is currently receiving recommendations for non-standing director candidates and conducting the first verification process. Two candidates have been recommended by management and two by the union, and reputation checks are underway. The next step is expected to narrow down one candidate from each side, after which President Bang will propose appointments to the Ministry of Strategy and Finance.

The union appears more confident than ever about the possibility of appointing their recommended candidates as non-standing directors. President Bang has no major objections to introducing the Union-Recommended Director System, and Hong Nam-ki, Deputy Prime Minister and Minister of Strategy and Finance, who holds the appointment authority, has publicly stated that he will "select candidates based on capability without prejudice."

It is known that the union’s recommended candidates include one from academia, such as a professor, and one from the labor sector. A KEXIM union official explained, "We emphasized practical expertise in candidate selection," adding, "There is no disagreement on their expertise, and we recommended individuals with field experience, especially those well-versed in financial operations."

However, considering precedents at Industrial Bank of Korea and Korea Asset Management Corporation (KAMCO), there are concerns that the introduction of the Union-Recommended Director System may face difficulties. In the case of the Industrial Bank of Korea, President Yoon Jong-won proposed the union’s recommended candidate to the Financial Services Commission (FSC), but the FSC reportedly rejected the candidate citing various issues.

Another burden is that the political sphere, which had promised support, has remained silent amid major issues such as the presidential election. Although politicians have repeatedly expressed intentions to promote legislation for the broader concept of labor directors to activate the Union-Recommended Director System, related discussions have not taken place recently. In response, the financial labor union and others have repeatedly voiced strong criticism over the potential failure to introduce the system.

A financial sector official said, "All procedures are expected to be completed as early as next month," adding, "KEXIM is understood to be preparing to discuss various matters with the Ministry of Strategy and Finance, including the method and scale of candidate proposals."