Financial authorities have prepared a plan to modernize the governance structure of financial holding companies by limiting the term of office of their chairmen to two terms, but they have indefinitely postponed its announcement. Despite strong promises to prevent the long-term reign of a 'corrupt inner circle,' the path to legislation is becoming unclear due to disagreements between the ruling and opposition parties.
According to financial circles and political circles on the 10th, the Financial Services Commission (FSC) has prepared an amendment to the Financial Company Governance Structure Act that limits the reappointment of financial holding company chairmen to one term. However, it has not yet confirmed a specific announcement date.
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However, even after nearly eight months, the improvement plan has not been made public. The FSC initially announced that it would announce the plan in March but abruptly canceled the schedule without further explanation. Later, Chairman Lee said at a press conference in June that "the announcement will be made before July 3rd, when KB Financial Group is scheduled to conduct short-list work," but this promise was also broken.
The announcement scheduled for July 31st was also canceled. The FSC planned to hold a meeting on 'Advanced Governance Structure of Financial Companies' with eight chairmen of financial holding companies under the chairmanship of Chairman Lee Buk-won, and announce the improvement plan. However, after the meeting was tentatively canceled, no further schedule has been set.
As the announcement is repeatedly delayed, concerns are growing that the core content originally included in the amendment may be omitted. Ruling party lawmakers also seem uncomfortable with legally enforcing reappointment restrictions, and the FSC's proposed amendment is struggling to overcome the hurdle of ruling and opposition party consultations. A National Assembly Legislative and Judicial Committee official said, "The atmosphere for legislation is practically difficult."
Alternative measures are being discussed in case the ruling and opposition parties fail to reach an agreement on legislation. Instead of limiting the number of reappointments, the proposal suggests raising the approval requirement at shareholder meetings for each reappointment. For example, a majority vote is required for the first appointment, 70% for the first reappointment, and 90% or more for the third term.
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The power of the Mafia is strong.
▶ Original source: https://news.nate.com/view/20260810n25325
