[Edaily Kim Se-yeon Reporter Im Yu-kyung] “There was no discussion among the outside directors, nor was there any prior coordination. However, everyone was surprised by the outcome of each committee member’s individual choice.”
#KB Financial Group’s Chairman Nomination Committee (hereinafter referred to as the Nomination Committee) caused a stir in the financial industry on the 11th by selecting Division Head Lee Jae-geun as the next chairman instead of incumbent Chairman Yang Jong-hee. This is because Chairman Yang has posted remarkable results over the past three years, and given the “incumbent premium” that typically applies, the reappointment of a financial holding company chairman has long been considered standard practice.
On the 14th, an outside director who served on KB Financial Group’s Nomination Committee told E-Daily in a phone interview, “Since the committee was formed, there had been no discussions or coordination among members regarding any candidate,” adding, “Each member made their own independent judgment without outside influence, and this was the result of their individual choices.” He noted, “However, when the results were revealed, the independence of the outside directors’ judgments was truly astonishing.”
To block the influence of the incumbent chairman and management, KB Financial Group formed the Nomination Committee exclusively of seven outside directors—excluding inside directors—and began operations last April. On the final day, the committee conducted two-hour presentations and interviews with the three candidates on the final shortlist and selected the candidate who received votes from at least two-thirds of the members present as the final chairman candidate. In other words, at least five committee members awarded the highest score to candidate Lee Jae-geun.

The financial industry views the activities of this KB Financial Group nomination committee as a clear indication that, unlike in the past, the independence and accountability of outside directors at financial holding companies are being strengthened. In the past, outside directors at financial holding companies were criticized for merely serving as “rubber stamps” that effectively rubber-stamped the incumbent chairman’s reappointment. However, this time, even though the incumbent chairman—who was eligible for reappointment—made it to the final shortlist, the nomination committee members chose change and renewal. By exercising independent judgment, they produced an unexpected outcome.
Kim Yong-jin, a professor in the Department of Business Administration at Sogang University, commented on the nomination of candidate Lee Jae-geun, stating, “It appears that the introduction of the independent director system through last year’s amendment to the Commercial Act has had an impact.” He added, “As the role of independent directors (formerly known as outside directors) becomes more important and their responsibilities grow heavier, this trend is likely to continue.”
However, some have pointed out that independence should not be implemented merely as a “show.” Professor Kim emphasized, “It is more important to evaluate who can best foresee the future and lead the organization effectively than to simply vote objectively.”