FSS Holds Meeting with Financial Holding Company CEOs
Federation of Banks: "Governance Must Reflect Individual Circumstances"
Lee Chan-jin, Financial Supervisory Service Governor, and Cho Yong-byeong, Chairman of the Federation of Korean Banks, are attending the 'Meeting between the Financial Supervisory Service Governor and Financial Holding Company Chairmen' held at the Bankers' Hall in Jung-gu, Seoul on December 10, 2025. Photo by Yoon Dong-joo
On December 10, Lee Chanjin, Governor of the Financial Supervisory Service, announced, "We will launch the 'Governance Improvement Task Force' related to succession in financial holding company governance within this month to develop improvement measures."
That afternoon, at the Federation of Banks Building in Myeong-dong, Seoul, Governor Lee met with the chief executive officers of eight financial holding companies and the Chairman of the Federation of Banks. He stated, "Succession of holding company CEOs is extremely important for the stability of the financial system."
Governor Lee emphasized, "Holding companies can earn the trust of shareholders and the market only when they have a transparent succession system and checks and balances by independent directors." He added, "The requirements and procedures for management succession must be clear and transparent, and must be based on fair and objective standards."
This is the third time recently that Governor Lee has raised the issue of advancing the governance of financial holding companies. During the National Assembly’s Political Affairs Committee audit in October, regarding the selection process for the chairman of BNK Financial Group, he said, "There are many unusual aspects, so I am closely monitoring the situation," and added, "There are some who, after becoming holding company chairman, fill the board of directors with their own people, essentially building a kind of trench."
Furthermore, at his first press conference after taking office on December 1, he criticized the ongoing efforts by some financial holding company chairmen to seek reappointment, saying, "The process of forming the board and selecting candidates is biased."
Recently, the reappointments of the chairmen of Shinhan Financial Group and BNK Financial Group have been confirmed. Woori Financial Group is also about to decide on the chairman’s reappointment, and the term of the chairman of KB Financial Group will expire next year.
Governor Lee also stated regarding outside directors, "We will promote the inclusion of outside directors specializing in information technology (IT) security and financial consumer protection on the boards of financial holding companies."
He reiterated the importance of consumer protection, particularly regarding misselling. He described failure in consumer protection as a "survival risk."
Governor Lee pointed out, "According to our review of the operation of accountability structures, internal control activities by executives have been limited to formal checks, and the establishment of supporting internal regulations or IT systems has been insufficient. Compared to the importance of the CEO’s role and responsibilities, the accountability structure is not sufficiently reflected in the system."
He especially stressed the need to establish more sophisticated standards for verifying customer understanding and suitability from the product design stage of financial products.
Additionally, he called for financial holding companies to enhance their assessment and evaluation processes for innovative companies to ensure the successful establishment of productive finance, and stated that the Financial Supervisory Service would also seek ways to reduce capital burdens within the limits permitted by international standards.
He also emphasized the social responsibility of banks, saying that the Financial Supervisory Service would encourage banks to fulfill their social roles by establishing a comprehensive evaluation system for inclusive finance and introducing a win-win finance index.
Cho Yongbyung, Chairman of the Federation of Banks, agreed on the need for proactive consumer protection and the establishment of a substantive internal control system, but also stressed, "A balance between consumer protection and the soundness of financial companies is necessary."
Regarding the governance improvements announced by the authorities, he said, "Governance must reflect each company’s management strategy and organizational characteristics to be effective," and added, "We hope the financial authorities will fully consider the individual circumstances of each financial company."
Chairman Cho added, "After operating the accountability structure for the past year, we have faced various practical difficulties from the perspective of financial companies, so we plan to gather industry concerns and propose institutional improvements soon."
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