[Viewpoint] An Organization Where Even the "Zhuge Liang of Finance" Cannot Succeed

Lim Jong-ryong, Chairman of Woori Financial Group, is nicknamed the "Master of Mediation." This is because he executes tasks and leads organizations with a gentle temperament without causing friction. When he took office as chairman of NH Nonghyup Financial Group in 2013, there were many concerns around him. Although he was the chairman of a financial holding company, he was also the head of an organization under the Nonghyup Central Association, which was influenced by political winds, limiting his room to maneuver. The hierarchy was strict, and the interference was intense. Despite this, Chairman Lim persuaded the Nonghyup Central Association’s cooperative heads and achieved the acquisition of Woori Investment & Securities in 2014. This laid the foundation for NH Nonghyup Financial Group to be classified among the top five commercial banks. For this achievement, Lim was praised as the "Zhuge Liang of the financial world," overturning the words of his predecessor Shin Dong-gyu, who said, "Nonghyup Financial is an organization where even Zhuge Liang cannot succeed."

In 2015, Lim was promoted to Chairman of the Financial Services Commission, serving for about two years and four months. After leaving public office, he returned as chairman of Woori Financial Group in March last year. This time, there was more talk than concern. Critics questioned whether it was appropriate for someone who had headed the financial regulator to lead a supervised institution. These comments arose because it was an unprecedented move. One question arises: Why did Lim, who had decisively declined better positions before, readily accept the chairmanship of Woori Financial Group?

Woori Financial Group, long under the Korea Deposit Insurance Corporation, had developed a lax organizational culture. The frequency and scale of financial accidents such as embezzlement and breach of trust far exceeded those of other financial companies. Recently, the issue of improper loans to relatives of former Woori Financial Group Chairman Sohn Tae-seung surfaced. It is understood that Lim was already aware of this matter before it became public through the Financial Supervisory Service’s audit. Nevertheless, he did not report it to the Financial Supervisory Service, which is a violation of the reporting obligation under the Banking Act. Excuses avoiding responsibility followed, such as "It was a minor issue like poor credit screening, so it was not reported." There was even an absurd claim that "this is common in other banks as well." The second question: Why did Lim, known for his competence and deep knowledge of supervisory regulations, handle this matter so poorly by covering it up, leading to this situation?

The situation has now escalated to the point where the positions of Chairman Lim and Woori Bank President Cho Byung-kyu are being discussed. On the surface, it appears that Financial Supervisory Service Governor Eom Bok-hyun is wielding a sharp sword. Various rumors have emerged: "This is an effort to oust Chairman Lim, who was strict about external requests," and "Chairman Lim, who tried to resolve factions within Woori Financial (commercial bank faction vs. Hanil Bank faction), was counterattacked." The third question: Why was Lim’s grand plan for organizational innovation, despite his careful and politically savvy reputation, so sloppy?

Upon reflection, it is hard to dismiss the idea that these missteps occurred because Chairman Lim was captured by certain factions and individuals within Woori Financial. Now, as he passes the midpoint of his term, there are talks that he will step down voluntarily. However, contrary to these rumors, it is understood that he has not yet expressed his intention to resign to the board. Lim reportedly believes that once he completes the portfolio encompassing securities and insurance, he will not cling to his position. However, with the recent issue raising questions about the major shareholder’s suitability, the mergers and acquisitions of financial companies such as insurance are expected to face thorny challenges. The phrase "Woori Financial is an organization where even Zhuge Liang cannot succeed" already echoes in the ears. It is simply regrettable.