Korean banking sector board governance is in its second year after jump-start style launching of outside director oriented board put together in a short period of time. With strong and positive leadership of Financial Supervisory Service, Korean banks come to have look and feel of global standard board with definite outside majority board, committee structure and processes slowly taking root. Recent survey, undertaken to firmly understand the current status of board governance showed decent start. Survey also showed 4 major areas of issues and improvement targets. They are roles and responsibilities of the board and management, committee function and guideline, board/director evaluation and turnover process, and evaluation and compensation of top management.
In this paper, we address those 4 areas and make recommendations to resolve the issues. The suggested guidelines that will contribute to shareholder value and management of banking institutions, among others, are as follows:
(1) Specify board duties into core documents and establish working guideline (terms of reference) for each committee.
(2) Recognize CEO's proper authority to make business decisions and to select/evaluate top managers.
(3) Mandate yearly evaluation of board/director performance, shorten director term to 1 year to allow timely turnover, and add more directors with business experiences and relevant expertise.
(4) Build evaluation process that links performance to pay and introduce incentive pay structure (stock option).
국내은행의 지배구조 개선방안
이사회의 기능, 성과평가 및 보상
[서울] : 한국금융연구원
|Series Title; No||정책조사보고서 / 2000-01|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|