CalPERS (California Public Employees' Retirement System), the largest pension fund in the United States, has decided to vote in favor of the proposal to appoint Lee Jae-geun, the next chairman candidate of KB Financial Group Inc., as an inside director.
Following global proxy advisory firms, a foreign institutional investor has also expressed its support, creating a favorable atmosphere ahead of the shareholders' meeting scheduled for Nov. 20. Successor appointments for the CEOs of affiliated companies are expected to follow immediately after the shareholders' meeting.
According to financial industry sources on Monday, CalPERS announced through its 'Global Proxy Voting Decision Disclosure' that it would vote in favor of the proposal to appoint Lee as an inside director at KB Financial's extraordinary general meeting of shareholders to be held on the 20th. This follows favorable recommendations from global proxy advisory firms such as ISS and Glass Lewis, with a foreign 'big player' also casting its vote in support.
The foreign shareholder ratio for KB Financial is recorded at 78%. Looking at the list of major shareholders, BlackRock Fund Advisors holds 7.41%, Capital Research and Management holds 7.17%, and JPMorgan Chase holds 6.17% as of the second quarter. Given the significant proportion of foreign shareholders, their influence has a substantial impact on the resolutions at the general meeting.
The KB Financial Chairman Candidate Recommendation Committee selected Lee as the next chairman candidate in September.
Following a review of qualification requirements, the proposal to appoint Lee as an inside director was submitted to the shareholders' meeting.
In its notice convening the general meeting, KB Financial stated that the candidate "has possessed deep expertise and insight into the financial industry overall by experiencing core group functions such as finance, strategy, global operations, and wealth management (WM) during his 34-year tenure at KB," adding that he is "the most suitable person to lead KB successfully at a time when bold change is needed to strengthen the group's fundamental competitiveness and secure future growth drivers."
If Lee is formally inaugurated through a resolution at the shareholders' meeting, the pace of personnel changes across KB Financial is expected to accelerate. A total of 10 CEOs of KB Financial subsidiaries have terms expiring by year-end.
This includes heads of major subsidiaries such as Lee Hwan-ju, President of Kookmin Bank; Kim Jae-gwan, CEO of KB Kookmin Card; Jung Moon-cheol, CEO of KB Life Insurance; Koo Bon-wook, CEO of KB General Insurance; Lee Hong-gu, CEO of KB Securities; and Bin Jong-il, CEO of KB Capital.
The appointment of the next bank president is expected to be made first. This is because the bank president participates as a member of the Subsidiary Representative Director Candidate Recommendation Committee (Daechuwi), the decision-making body that recommends candidates for subsidiary CEOs. The Daechuwi is chaired by the holding company chairman and consists of the Kookmin Bank president and three outside directors.
Therefore, it appears that the bank president's appointment will be finalized first at the end of this month, followed by sequential personnel changes for the remaining subsidiaries. In fact, in 2024 as well, KB Financial selected Lee Hwan-ju as the final candidate for Kookmin Bank president on Nov. 27 and confirmed the final candidates for other subsidiary CEOs nine days later, on December 6.
Attention is focused on this personnel change as it proceeds amid the financial regulator's re-emphasis on the transparency of appointment procedures not only for holding company chairmen but also for subsidiary CEOs.
Lee Chan-jin, governor of the Financial Supervisory Service, met with holding company chairmen to urge them to ensure the substantive role of subsidiary nomination committees in the recommendation and selection process for CEO candidates, and instructed board chairs to strengthen control over succession procedures.
In response, Shinhan Financial granted candidate recommendation authority to its bank nomination committee, while Woori Financial established a management performance review procedure within its nomination committee, improving governance by increasing the involvement of bank boards in CEO appointment procedures.
Similarly, KB Financial has begun revising its regulations in a direction that expands the authority of subsidiary boards. A financial industry official said, "As the financial regulator emphasizes strengthening the personnel authority of subsidiary boards in line with the intent of the governance improvement plan, financial holding companies have no choice but to adjust their procedures accordingly."
in FINANCE
