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- Title
KB Kookmin Bank in Korea.
- Authors
Cho, Moon-Kyung; Lee, Ho-Young; Song, Dan-Bee
- Abstract
KB Kookmin Bank (KB) was the most prominent commercial bank in Korea. However, KB faced two challenges: declining firm performance and a lack of transparency in corporate governance at the level of its financial group, KB Financial Group (KBFG). By the end of 2012, KB was not a market leader in Korea any more. In addition, a conflict arose between the CEO and some members of the board of directors (BOD) of KBFG when an insider leaked private information to the International Shareholders Services (ISS). The insider reported that certain BOD members decreased firm value by disrupting the senior management's strategic plan to increase the firm's long-term competitiveness, which required attention from institutional investors. KBFG had three issues based on the inside information provided and an independent analysis. First, its CEO had been selected from outside KBFG, and he was under pressure to improve firm performance before his term was over. Second, some KBFG BOD members did not represent the interests of the company's general shareholders, including foreign institutional investors and the National Pension Services of Korea. Finally, the heavy influence of the Korean government was culturally ingrained within the corporate governance structure of KBFG.
- Subjects
SOUTH Korea; KB Kookmin Bank (Company); BANKING industry; VALUATION of corporations; STOCKHOLDERS; KB Financial Group Inc.
- Publication
Asian Case Research Journal, 2016, Vol 20, Issue 2, p283
- ISSN
0218-9275
- Publication type
Article
- DOI
10.1142/S0218927516500103