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Internet banks perform poorly in board gender diversity

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By Anna J. Park

Internet-only banks that have been vocal about their demand for innovation have turned out to be actually lagging behind their traditional peers in their environmental, social and corporate governance (ESG)-related efforts.

They've been especially weak in fulfilling the governance factor. K bank and Toss Bank haven't even appointed any female independent board members yet, while KakaoBank has appointed only one female board executive out of its six independent board members. She is Lee Eun-kyung, a former judge and legal expert with ample advisory experience in gender and human rights issues.

The reason that KakaoBank appointed a female board member is to abide by the revision of the country's Capital Markets Act. The revision obligates companies with over two trillion won ($1.5 billion) worth in capital assets to avoid board members being of a single gender, requiring the firms to appoint at least more than one female board member into their executive group.

KakaoBank has also set up an ESG committee within its board, which is the first attempt to do so among the country's internet-only banks. The ESG committee aims to devise sustainable management strategies, while carrying through the firm's related initiatives to pursue ESG goals. The digital bank also aims to publish an annual sustainable management report to publicize its achievements in ESG-related fields.

K bank, meanwhile, has to appoint female board members, as it aims to go public as early as next year. Once the firm is listed, the bank will be required to abide by the Capital Markets Act. Currently, all 8 independent board members of the bank are male, which will be in violation of the Capital Markets Act revision, requiring that companies have more than one gender represented on their boards.

A K bank official explained that the bank will recruit female board members, once a specific timeline for the listing is determined.

Toss Bank is also having a similar problem: all six members of the bank's independent board are male. The bank said it is considering appointing female board members in the long-term perspective. ?

Park Ji-won


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