[The Editors' Verdict] Appoint the Next Woori Bank CEO as the Second Yoon Jongkyu

With Jo Byung-kyu, CEO of Woori Bank, set to complete his term at the end of December, Woori Financial Group is proceeding with the selection process for the next Woori Bank CEO. According to the governance best practice guidelines, the recommendation process must begin three months before the term expires and be completed one month prior. Since the recommendation is to be finalized by the end of November, the decision on the new CEO is imminent.

In a planned series from September 2 to 5, Asia Economy pointed out that the financial scandals at Woori Bank, including improper loans involving former Chairman Sohn Tae-seung’s relatives, are not merely individual deviations but stem from a long-accumulated flawed organizational culture. Fundamentally, unless the organizational culture changes, such incidents will continue to occur.

For the organizational culture to truly change, the new CEO should not be an internal candidate. Within the bank, there is talk that since Jo Byung-kyu was from the commercial banking side, the next CEO should come from Hanil Bank. While the holding company sets strategies and major policy directions and can appoint an external CEO, the bank is a business operation where it is said that an internal CEO who knows the organization well is naturally preferred.

However, in the case of Woori Bank, being an internal candidate means being steeped in an outdated organizational culture, which is a disqualifying factor. To break the long-standing culture of connections, hierarchical relationships, and opportunistic behavior, the CEO must be an external candidate. Woori Bank accounts for over 90% of Woori Financial Group. If the bank does not change, Woori Financial Group cannot change.

Within Woori Bank, employees who joined after the merger of Hanil Bank and Commercial Bank into Hanvit Bank are called the V generation. This name is derived from the 'V' in Hanvit Bank’s English name. Employees who joined later under Woori Bank are sometimes called the W generation, but broadly, those who are not from the Hanil-Commercial background are referred to as the V generation.

The first public recruitment V generation entered through the 2001 year-end public recruitment. The V generation has been with the bank for nearly 25 years and currently includes some branch managers and head office department heads. The Hanil-Commercial generation retires after about five years due to reaching retirement age. There is an argument that for Woori Bank’s organizational culture to change, the Hanil-Commercial generation must disappear and the V generation must take the lead. However, some view that the V generation still maintains connection-based culture favoring Hanil and Commercial backgrounds.

Even if the new CEO is familiar with the current organizational culture, change is possible if they establish a fair personnel and performance reward system and implement it properly over a long period. KB Kookmin Bank under Yoon Jong-kyu is an example of this.

The appointment of the Woori Bank CEO should start with finding a second Yoon Jong-kyu. Naturally, external candidates will be included in the current CEO selection process. It is hoped this is not a mere formality. Currently, there are no reports of recommendations coming from headhunting firms. It is hoped that a wider range of talented candidates will be considered through various channels.

For Woori Financial Group and Woori Bank, the next few years until the V generation takes the forefront is a golden opportunity. If an external new CEO emerges and makes neutral, objective, and rational decisions, the V generation can break away from the flawed organizational culture of the previous generation and open a new era with a complete generational change.

Additionally, at the National Assembly audit in October, Chairman Lim Jong-ryong stated, “We will abolish the prior agreement system related to subsidiary executive appointments and guarantee autonomous management of affiliates.” This makes the role of the new CEO even more critical.

We hope that the ‘V generation’ at Woori Financial Group and Woori Bank will become not just the Hanvit generation but the ‘Victory (V) generation.’ We support the ‘V generation.’