KB Financial's chief director resigns amid reform

KB Financial-chief director


SEOUL, Feb. 5 (Yonhap) -- The chief of KB Financial Group Inc.'s board of
directors offered to resign Friday amid moves by the South Korean government to
reform non-executive boards of the nation's banking groups.

Cho Dam, the chairman of KB Financial's board of directors, expressed his
intention to step down as a non-executive board member, said the nation's biggest
financial service company that also controls top lender Kookmin Bank.
He has been under pressure to resign after the trade association for the banking
sector unveiled new guidelines last month that restrict outside directors to
two-year terms and a maximum service of five years, reversing the previous rules
that allowed three-year terms for an unlimited period. He has been serving for
more than five years in the post.
Cho is the third outside director to offer to resign from KB Financial's board
recently. Kim Han and Byun Bo-kyung, two of the group's nine outside directors,
expressed their intention to resign last week.
The latest resignation led KB Financial to cut the number of members of a
committee for nominating new non-executive directors down to five. The committee
previously had all nine of the outside directors as its members.
The changes came as the government has tried to increase the independence of
outside directors and curb cronyism between directors and company executives at
banking groups.
Non-executive directors have been criticized for turning a blind eye to risky
decisions by local banks that resulted in massive losses, particularly in light
of the recent global financial crisis.
The new guidelines also ban outside directors from taking stock options and other
performance compensation from the firms that they serve.
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