The Financial Supervisory Service on Thursday issued warnings to two major banking groups here -- Woori and Hana -- directing them to improve their overall transparency and corporate governance.
The financial watchdog noted that Woori Financial Group’s board meeting minutes -- which serve as official legal records -- between January and September 2019 lacked transparency.
The minutes were treated “as mere formalities” and contained few details such as the substance of the discussions among board members, the FSS said. They consisted only of commencement and closing speeches, the agenda for each meeting and a summary of its outcome.
Woori’s board discusses key issues at gatherings that are usually held a day ahead of the actual board meetings, leaving little to discuss at the official meetings, the FSS said.
The watchdog pointed to a law requiring that board meeting minutes include substantive details, such as the names of members who oppose a certain resolution and their reasons.
Regarding Hana Financial Group, the FSS took issue with its treatment of external board members.
The holding group did not uphold its internal rule requiring that necessary documents be sent to external board members a week ahead of each scheduled board meeting. Instead it asked them to agree to receive them only on the day of the meeting.
Hana also reduced its ratio of external to internal board members, the FSS said. The number of external members was down to one, from three in February 2018.
The FSS called for board diversity at Hana and strengthened compliance monitoring of its employees.
Hana’s flagship banking unit, Hana Bank, also received a warning over its system of appointing external board members.
The two banking groups and Hana Bank are required to file explanations and documents in response to the warnings within six months.