South Korea's Financial Services Commission proposed changes to corporate governance rules aimed at addressing a lack of transparency in nominating the heads of local banks, The Korea Herald reported March 15.
The regulator proposed prohibiting the incumbent chief of a financial company from joining a committee that nominates outside directors. The regulator also proposed requiring financial companies to ensure that the nomination committee is made up of more than two-thirds of outside directors.
Financial companies will also be required to carry out external screening of an outside director's eligibility if the director serves more than a second term. The regulator would also require companies to disclose their requirements for a new CEO before the nomination stage.
Choi Jong-ku, chairman of the FSC, said the proposed rules are meant to curb the influence of incumbent executives in the nomination process of CEOs and outside directors.
The regulator expects to implement the revisions in the first half of 2019.
