Bank unions push for influenceThe labor unions of major commercial banks are flexing their muscles to bolster their influence through the appointment of outside directors who will represent their voice, continuing a dispute over employees’ lack of influence on management decisions.
The union at Shinhan Bank said on Thursday that it will put the issue of union-nominated directors on the agenda in a shareholders’ meeting in March. The members are entitled to propose agenda items because the employees stock ownership association has a combined 4.73 percent stake in the bank as the third-largest holder.
The head of the Korea Financial Industry Union, a union for banks operating in Korea, made it clear that the group will actively work toward introducing union-nominated directors.
“We need to contain power abuse by management and power needs to be split among workers, one of the most important constituents of a company,” said Heo Kwon, president at the Korean Financial Industry Union.
Business lobbying groups refuted the argument, saying that the interests of a labor union don’t always go hand in hand with those of shareholders.
The Shinhan union’s attempt follows an aborted effort by KB Financial Group’s union to add an activist lawyer to the group’s board in November.
The majority of stakeholders rejected the idea, while U.S.-based Institutional Shareholder Services, a global proxy advisory firm, also advised shareholders to vote against the nomination of a union-selected lawyer.
But the proposal to introduce a new system where the labor unions can propose an outside director was endorsed by the National Pension Service, which is the largest stakeholder with a 9.79 percent stake.
Since the pension operator is the largest stakeholder of a number of major Korean banking groups, including Hana Financial Group, Shinhan Financial Group and Woori Bank, with a stake over 9 percent, observers expected that the same proposal could quickly reverberate across other banks.
Choi Jong-ku, chief of the country’s financial regulator, called for a cautious approach in November, saying that an agreement between the management and unions should precede any attempt to adopt the measure.
A source at KB Kookmin Bank’s union said that the members will push for the appointment in a shareholders’ meeting in March.
“We haven’t decided whether we will recommend the same candidate, but we plan to propose an outside director anyway, possibly with a civic activism background,” the source said.
BY PARK EUN-JEE [email@example.com]
with the Korea JoongAng Daily
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