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KB Financial union’s attempt to hire outside director falls through yet another year

KB’s shareholders consent to another term for its incumbent chairman and flagship lender’s CEO, but disapprove union-recommended outside directors

KB Financial Group hosts shareholders meeting at its headquarters in western Seoul on Friday. (KB Financial Group)
KB Financial Group hosts shareholders meeting at its headquarters in western Seoul on Friday. (KB Financial Group)
KB Financial Group labor union’s attempt to convince shareholders to appoint two outside directors recommended by them fell through Friday, deflating the union’s yearslong efforts to enter the boardroom.

Following a shareholders meeting held in the morning, KB Financial Group said that the appointment of outside director candidates Sustinvest CEO Ryu Young-jae and Seoul National University environmental studies professor Yun Sun-jin was “rejected” based on the votes cast by the attending shareholders.

Ryu and Yun each received some 3.8 percent and 4.6 percent approval, falling noticeably short of the 50 percent needed for their appointment.

Meanwhile, KB Financial’s current chairman Yoon Jong-kyoo and KB Kookmin Bank’s incumbent CEO Hur Yin -- recently tapped by the board to serve their respective third and fourth terms -- have been confirmed to continue their roles at the same meeting.

Yoon and Hur both received some 97 percent approval from the attending share capital, a landslide victory in comparison with the union-recommended nominees.

Yoon and Hur were nominated by KB’s employee shareholders -- which currently owns a 1.73 percent stake in the banking group -- on Sept. 29 as “environmental, social and governance experts.” Though not all KB employees with stock options are labor union members, the head of the employee shareholder group is currently the chief of the firm’s labor union, allowing the chief to release statements on behalf of the two separate groups, a KB official told The Korea Herald last week.

Friday’s announcement follows major proxy advisers’ request to KB’s shareholders to vote against the appointment of the two union-recommended outside director nominees. South Korea’s largest proxy adviser the Korea Corporate Governance Service released reports supporting the requests earlier this month, echoing reports by global peers Institutional Shareholder Service and Glass Lewis. They expressed doubt that the appointment of the two nominees would lead to an improvement in shareholder and the firm’s ESG values.

The appointment of the two labor-appointment nominees was widely expected to fail this year as KB’s overseas shareholders, which hold more than 60 percent stake combined, were projected heed the advice of the ISS and Glass Lewis. KB’s labor union has officially recommended outside board members since 2017.

KB’s shareholders include JP Morgan with a 6.4 percent stake and the Government of Singapore with a 2.47 percent stake. Its largest shareholder is Korea’s National Pension Service, with a 9.97 percent stake.

By Jung Min-kyung (