BNK Financial Group said on Feb. 27 it has begun discussions on governance reform measures, including introducing a special resolution at shareholder meetings when reappointing a chief executive officer (CEO). It held a meeting of outside directors ahead of a board meeting.

All 7 outside directors attended the meeting and exchanged views, focusing on a plan under review by financial authorities to introduce a special shareholder resolution for CEO reappointments and the direction of a governance improvement task force. They agreed to treat the outcome of the authorities governance reform task force talks as the top standard and swiftly reflect related content in the company’s articles of incorporation.

BNK Financial currently limits reappointments to 1 term to prevent a concentration of power in the hands of the representative director and chairman. It applies governance standards that it said are strengthened compared with the industry, including a 1-year term for the board chair that can be renewed once.

At the upcoming annual shareholders meeting, it plans to replace 5 of its 7 outside directors. It plans to expand the number of shareholder-recommended outside directors to 4 from 1. It also plans to raise the number of female outside directors to 2 from 1 to enhance the diversity and expertise of the board.

It plans to review introducing a single 3-year term for outside directors and to strengthen transparency and independence in the appointment process by improving procedures for selecting outside director recommendation firms (search firms).

To improve transparency in CEO succession procedures, the executive candidate recommendation committee is also reviewing a plan to be composed of all outside directors and to make screening criteria at each stage more specific.

A BNK Financial official said the group plans to reflect, as a top priority, improvement measures discussed by financial authorities in the governance reform task force (TF). The official said governance is a key factor that affects the sustainability of financial companies and market trust, and the group will proactively reflect the authorities policy direction, continuously upgrade its systems and build a transparent governance framework that meets global standards.