Unions to exert greater influence over banks in 2022

Korea's time


Unions to exert greater influence over banks in 2022

The Federation of Korean Trade Unions (FKTU) is holding a rally outside the National Assembly in Seoul in this file photo from December 14.  Courtesy of FKTU
The Federation of Korean Trade Unions (FKTU) is holding a rally outside the National Assembly in Seoul in this file photo from December 14. Courtesy of FKTU

Presidential candidates back pro-worker policies to attract voters

By Park Jae-hyuk

The possibility for private finance companies to have union-backed directors has grown, since the main conservative opposition party, the People Power Party (PPP), agreed to the idea of ​​giving seats on the board. administration of public institutions to workers’ representatives, in an apparent attempt to win the hearts of working-class voters in the March presidential election.

At Friday’s meeting of the National Assembly’s Strategy and Finance Committee, PPP lawmakers decided to support the revision of the law on the management of public institutions, which was proposed by the Democratic Party of Korea (DPK) in power to allow workers in public institutions to exercise their speaking rights on boards of directors.

According to the standing committee, the revision will be adopted this month.

The main opposition party changed its stance after its presidential candidate, Yoon Suk-yeol, formally pledged to accept the pro-worker policy, when it met with representatives of the Federation of Korean Trade Unions, the December 15.

“I hope this system will become a great help for public institutions to rationalize and prevent insolvency,” he said at the time.

Passage of the revised bill will require Korea Asset Management Corp., Korea Deposit Insurance Corp., Korea Housing Finance Corp., Korea Credit Guarantee Fund and Korea Inclusive Finance Agency to allocate seats on the board of directors. to representatives of their unions.

Although the Industrial Bank of Korea (IBK) and the Korean Development Bank (KDB) are not subject to the new regulations, the two state-owned banks are expected to face increasing calls to adopt the system, as the Bank of Korea Korea’s export-import previously appointed a union-backed non-executive director in September.

The IBK union plans to ask management to appoint a union-backed director in March, when the bank’s two non-executive directors end their terms. The KDB union is also planning to make a similar attempt this year.

If state-run banks give their board seats to directors recommended by their unions, private sector banks will be encouraged to demand the introduction of the worker-friendly system.

The KB Kookmin Bank union, which has requested the appointment of a union-backed director since 2017, plans to reapply this year, ahead of the general meeting of shareholders in March.

Woori Bank is also seen as having the potential to seek the appointment of a union-backed director, as the Woori Financial Group employee shareholding association became the group’s largest shareholder, following its privatization last year. .

Amid the growing possibility of union involvement in the management of local banks, employers have expressed concerns about potential setbacks in rapid decision-making procedures.

Korea Business Federation President Sohn Kyung-shik has chosen worker representation on boards of public institutions as one of the fear factors for companies this year.

“I hope that the presidential candidates will come up with policies aimed at creating a business environment where freedom of economic activity and entrepreneurship are respected,” he said in his New Year’s speech.

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