|Industrial Bank of Korea CEO Yoon Jong-won, second from right, poses with Kim Hyung-sun, center, the lender's labor union chief, at the headquarters of the Korea Federation of Banks in Seoul, on Jan. 27 last year. Yonhap|
By Lee Min-hyung
The Industrial Bank of Korea (IBK) is under pressure to give its union more of a say in its decision-making process, as a person recommended by the union is expected to become a non-executive board member for the first time in the country's banking industry.
With two of the state-run bank's outside members set to finish their terms in February and March, respectively, the union demanded at least one of the two seats should be filled by an individual it will recommend.
The union plans to select candidates for the position by the end of the month and speed up discussions with IBK CEO Yoon Jong-won over the plan.
The union has urged the IBK chief to agree to introduce the union-recommended outside director appointment system.
It hopes to set an exemplary case in the financial industry and plans to institutionalize the system, so other firms can follow a similar path. The union is looking for experts in the area of consumer protection and environmental, social and corporate governance as suitable candidates for the position.
"Nothing has been fixed over the specifics regarding the system's institutionalization," an official from the lender said. "The union can recommend candidates for the position, but both sides have yet to reach any consensus over whether the IBK should appoint a union-recommended figure."
All eyes are on whether the lender will be able to adopt the system, as this was one of President Moon Jae-in's election pledges. For the IBK management, however, this will come as a burden, as there stands a chance that conflict between management and the union could intensify once the latter attains a stronger influence through the non-executive position.
If the plan proceeds smoothly, this will likely create a ripple effect among other state-run financial organizations, as the IBK is far closer to the introduction of this system compared to any other financial organizations here.
Unions from other state-run lenders ― the Korea Development Bank and the Export-Import Bank of Korea ― will also be able to speed up similar discussions following the result from the ongoing talks between IBK management and its union.
But it remains to be seen whether private financial firms will adopt the system in the foreseeable future.
The union at KB Financial Group, the nation's largest financial holding firm by market capitalization, pushed a virtually identical plan last year but without success.