Unionized Korea Development Bank (KDB) workers have decided to make an attempt to introduce a worker director system for the second time in the local banking industry following Industrial Bank of Korea (IBK).
The unionized workers can exercise more influence on the management of their bank once the worker director system is introduced, that is, once their representative is allowed to exercise voting rights and rights to speak in the board of directors of the bank. The entrepreneur community is opposed to the system, mentioning the possibility of infringement on management, delayed decision making and investment contraction.
Those in the industry point out that KDB is more likely than IBK to succeed in introducing the system. In each of the two, a director candidate recommended by its committee for the purpose is to be recommended by its head and appointed by the Financial Services Commission. In the case of IBK, an approval from the Ministry of Economy and Finance is additionally required in that the ministry currently owns 50.9 percent of the bank. The fact that IBK is a listed company is another hurdle to the introduction of the system.
On the contrary, KDB can introduce the system regardless of the Ministry of Economy and Finance. In addition, unionized KDB workers are pushing to include their representative in their bank’s director candidate recommendation committee. If this succeeds, they can exercise their influence on outside director appointment even without a worker director system.