Key facts
- The agreement was announced after a meeting of government officials and Democratic Party lawmakers at the National Assembly on November 12.
- Democratic Party Rep. Yoo Dong-soo said the CEO recommendation committee would consist entirely of independent directors.
- The Financial Services Commission said initial appointment would require approval from at least two-thirds of all committee members.
- The current requirement is a majority of members present, according to the Financial Services Commission.
- A CEO seeking a second term would need approval from at least three-quarters of the committee, the FSC said.
- The two sides also agreed to let shareholders recommend candidates to the committee's independent directors.
South Korea's government and the ruling Democratic Party agreed on November 12 to push for stricter requirements for the reappointment of chief executives of holding companies in the banking sector. The plan was announced after a meeting between government officials and DP lawmakers at the National Assembly in Seoul to discuss ways to improve corporate governance.
"To prevent incumbent CEOs from exerting influence, we will ensure that the CEO recommendation committee consists entirely of independent directors and gradually tighten the requirements for the reappointment of CEOs to establish a transparent and fair succession process," DP Rep. Yoo Dong-soo, chair of the parliamentary national policy committee, said at the meeting.
The two sides also agreed to allow shareholders to recommend candidates to the independent directors of the recommendation committee. According to the Financial Services Commission, a CEO candidate would need approval from at least two-thirds of all committee members for an initial appointment, compared with the current requirement of a majority of members present. A stricter requirement would apply to a CEO seeking a second term, with the candidate requiring approval from at least three-quarters of the committee members.
The report did not state when the changes would take effect or what legislative or regulatory steps remain.