Shinhan Financial Group has narrowed the next candidate pool for the heads of Shinhan Bank and Jeju Bank, whose terms expire at the end of this year. Starting this year, it expanded the role of each bank’s executive candidate recommendation committee and had it participate directly in the CEO selection process from recommendations to final nominee selection.

Shinhan Financial’s Subsidiary CEO Candidate Recommendation Committee held a meeting on Oct. 27 to review recommendations for chief executive candidates at subsidiaries whose CEOs’ terms end later this year, it said on Oct. 28.

The committee selected a first-round candidate pool for the Shinhan Bank and Jeju Bank CEO posts equal to about 2 to 3 times the size of the final shortlist. It plans to confirm the final shortlist through additional discussions in November, then recommend final candidates in early December after in-depth interviews and evaluations.

The process strengthened the role of each bank’s executive candidate recommendation committee. Unlike before, each bank committee reviews and recommends its own candidate pool, and the holding company committee then reviews those candidates and recommendations to select the shortlist.

Earlier, the holding company committee shared information on succession candidates with the bank committees when it began succession procedures for subsidiaries on Sept. 21. The bank committees then set qualification requirements for the next bank heads, considering internal and external business conditions and future strategic direction, and reviewed candidates who met those requirements before recommending them to the holding company committee.

Shinhan Financial explained that, as the procedure was introduced for the first time this year, it prepared separate review criteria and operating methods to focus on improving fairness and transparency in candidate screening.

The participation of the bank committees will also be expanded in the final selection process. A new procedure has been introduced under which the head of the bank committee attends the holding company committee’s final meeting, explains the review results to date and presents an opinion on the selection of the final nominee.

As a result, the bank committees will take part in the bank CEO succession process not only in recommending candidates but also through the final nominee selection stage.

The holding company committee also confirmed review criteria for CEO candidates at 10 subsidiaries, including Shinhan Bank, on the day.

It plans to evaluate candidates based on the confirmed criteria and the recommendations from the bank committees, conduct in-depth interviews with the final shortlist and select final nominees.

The finalists are expected to begin their terms from January next year after procedures including reviews by each subsidiary’s executive candidate recommendation committee and approvals by the board and shareholders’ meeting.

A Shinhan Financial Group board official said the bank committees’ new procedure for recommending candidates for bank CEO posts would help strengthen the independence and accountability of subsidiary boards. The official said the holding company committee and the subsidiary committees would work closely to establish a fair and transparent management succession system.