Lee Chanjin Summons Financial Holding Chairmen Before Bank Presidents' Reshuffles: "CEO Appointments Must Exclude Factions and Personal Ties"

Calls for Transparent and Fair CEO Succession at Eight Holding Companies
"Ensuring Substantive Role of Subsidiary Nomination Committees"
Audit Announced for Cooperative Project Expenses Amid Fierce Competition for Local Government Treasury Accou

Lee Chanjin, Governor of the Financial Supervisory Service, convened the chairpersons of eight major financial holding companies ahead of a large-scale year-end reshuffle involving CEOs across the financial sector, including the heads of the five largest banks, and called for transparent and fair CEO succession procedures. This comes just a week after he publicly urged improvements in the CEO succession process. As some of the CEO selection procedures for the five major banks have already started or are set to begin within the month, Lee has reiterated the importance of merit-based appointments and the substantive role of the subsidiaries’ Executive Candidate Recommendation Committees (Imchuwi), signaling a warning against excessive influence by holding company chairpersons over personnel matters.

Lee Chanjin, Financial Supervisory Service Governor, is delivering opening remarks at the Asset Management CEOs meeting held at the Korea Financial Investment Association in Yeouido, Seoul on July 13, 2026. Photo by Yoon Dongju

On September 23, Lee held a meeting at the Financial Supervisory Service headquarters in Yeouido, Seoul, with the chairpersons of eight financial holding companies and the head of the Korea Federation of Banks. During the meeting, he requested, "Please ensure that when appointing CEOs of subsidiaries, qualified candidates are selected based on competence, without being swayed by specific factions or personal relationships." He added, "The second half of this year marks a period of change, with CEO selection procedures progressing for the heads of banks and some 70 subsidiaries. The financial sector must enhance market and public trust by adhering to fair principles in its work."

Lee called for concrete standards and procedures throughout the succession process, from the identification of CEO candidates to their verification, evaluation, and documentation. In line with the intent of Article 17 of the Act on the Corporate Governance of Financial Companies, he emphasized that the Executive Candidate Recommendation Committees (Jachuwi) of holding companies should ensure that the subsidiaries’ Executive Candidate Recommendation Committees (Imchuwi) play a substantive role during the process of recommending and selecting CEO candidates. To this end, he instructed that Imchuwi should be provided with sufficient information, such as a pool of CEO candidates, and that the opinions of Imchuwi members should be incorporated in the evaluation process.

These remarks came about a week after Lee called on financial holding companies to strengthen the CEO candidate recommendation authority of the bank-level Imchuwi. On September 15, Lee also noted, "The CEO succession processes established by the holding company’s Jachuwi are insufficient, and the role of subsidiaries’ Imchuwi is also limited," demanding greater transparency and fairness in succession procedures.

Given the imminent year-end CEO reshuffles, Lee's comments are seen as aimed at preventing the undue influence of holding company chairpersons over affiliate personnel decisions or at forestalling the so-called ‘trench-building’ for extended tenure. By year’s end, the terms of 54 affiliate CEOs at the five major financial groups will expire, and the terms of all five major bank CEOs are set to end, requiring decisions on either their reappointment or replacement.

In response to the Financial Supervisory Service’s repeated warnings, financial holding companies are also working to refine their CEO succession processes. BNK Financial Group and Shinhan Financial Group have each granted CEO candidate recommendation authority to their respective bank-level Imchuwi, thereby expanding the committee’s role. KB Financial Group is also reviewing related measures. Hana Bank and Woori Bank have already delegated such authority to their Imchuwi.

Lee stated, "With many subsidiaries under financial holding companies beginning their CEO succession procedures in the second half of this year, it is an excellent opportunity to prove that efforts to avoid ‘trench-building’ and to improve the process have not been in vain."

He also issued a warning about excessive competition in local government depository bank bids. He stated, "It could be perceived as unfair competition when banks with greater capital strength secure bids by competing over partnership project funds," stressing, "Please also consider the circulation of funds within the region and balanced regional development."

The Financial Supervisory Service plans to check whether banks have thoroughly analyzed the impact of partnership project fund expenditures on their financial soundness and profitability in the future.

Additionally, Lee called for stronger internal controls to prevent financial incidents. The number of banking sector financial incidents increased from 33 cases, amounting to 69.69 billion won in 2023, to 47 cases, totaling 171.25 billion won during the January-July period of this year. Lee stressed that sufficient personnel and resources need to be allocated to ensure that internal controls are genuinely effective. He added that, in the event of future violations, the appropriateness of evaluation and compensation systems, as well as any organizational incentives, would be examined.

Lee concluded, "Without the trust of the market and the public, the financial industry cannot exist," urging the holding company chairpersons to "carefully reconsider the impact and social responsibility of important decisions on Korea’s financial industry."

This content was produced with the assistance of AI translation services.