South Korea’s government and ruling Democratic Party jointly announced plans to tighten bank holding company CEO selection, giving shareholders and independent directors more oversight amid concerns about succession at firms with dispersed ownership.
The Financial Services Commission (FSC) said CEOs can exert influence over succession at groups that lack controlling shareholders. It said stronger monitoring by shareholders, including institutional investors, is intended to support consumer protection and sound growth.
The commission cited recurring governance controversies and a January 2026 review of eight bank holding companies. The review identified issues involving CEO succession, outside-director selection, board oversight and compensation.
Under the proposal, bank holding companies’ CEO nomination committees would consist of independent directors. At least two-thirds of all committee members would have to approve a CEO candidate, compared with a majority of members present under current rules. A CEO seeking reappointment would need support from at least three-fourths of committee members.
Shareholder approval thresholds would also increase with each repeat term. An initial appointment would require a majority of voting rights represented at the shareholders’ meeting and support from holders of at least one-fourth of all issued shares. A first reappointment would require two-thirds of voting rights represented at the meeting and support from holders of at least one-third of issued shares. For a second or later reappointment, the thresholds would be three-fourths of voting rights represented and at least half of all issued shares.
The plan would add nonfinancial considerations, including financial incidents and sanctions, to CEO evaluations. It would also give outside candidates more preparation time. The FSC plans to prepare draft governance-law and best-practice amendments by year-end 2026, while pursuing subordinate-rule changes quickly.
