Shinhan Group starts anewShinhan Financial Group nominated a former executive of its life insurance unit as its new chairman in hopes of starting afresh after a much-publicized internal power struggle.
Han Dong-woo, whose nomination must be formally approved by shareholders in March, is faced with the task of rebuilding confidence in the country’s third-largest banking group. He must endeavor to rebrand the bank. He must live up to the high expectations of his shareholders and customers.
The Shinhan feud that led to resignations of its top leaders and an investigation into embezzlement amid a power struggle exposed the limits of the Korean financial industry. Shinhan, which before the crisis had an image of transparency, was embroiled in accusations of embezzlement and illegality between the group chairman and bank chief executive. The top leadership of the financial group is suspected of embezzling customers’ money and frequently conducting under-the-table dealings with shareholders.
The panel that should have kept its eyes open existed largely in name only. Executives ignored local shareholders and devoted themselves to their Japanese shareholders. Financial supervisory authorities stayed on the sidelines and worsened the situation.
Lobbying and internal competition were equally intense during the process of naming the group’s new chairman. Rumors say the nominated chairman also has the support of his predecessor. But now that he is at the helm, the new chairman must remember that he represents Shinhan Financial Group, not a certain individual. He must eradicate past stains and reinvent the financial group’s image as well as create a succession program to avoid feuds over new leadership.
This crisis can pave the way for the group to move toward a broader market. To do so, the controversial past figures must leave the group as early as possible to help the once-beloved company start anew.