Momentum builds for corporate governance reform with Lee Chan-jin as new FSS Chief
Lee Chan-jin is expected to prioritize shareholder rights, good corporate governance, and stewardship code
We urge that new government appoints similar reform-minded CEO for NPS
Our Forum strongly supports the appointment of attorney Lee Chan-jin as the new Governor of the Financial Supervisory Service (FSS). While some local press dismiss him as not being a financial expert, we believe Lee is the ideal candidate to drive capital market upgrade and corporate governance improvement. To execute capital market reform with conviction, it may be preferable to appoint an individual from outside the financial sector who is free from conflicts of interest, rather than a bureaucrat or academic. Korea's banking system is relatively sound and its financial supervisory framework is well-established, arguably to an excessive degree. The Governor should focus on the capital market's fundamental problems, such as establishing a fair market order and resolving the issue of controlling shareholder’s abuse of power, rather than getting bogged down in these micro-level issues. According to his inauguration speech on August 14th, Governor Lee emphasized shareholder value-centric management and the establishment of a fair governance system. He is expected to use a "carrots and sticks" approach to ensure the successful implementation of Commercial Act amendments that passed the National Assembly on July 3rd.
He is likely to emphasize the accountability of institutional investors. The Governor's background provides strong evidence for this focus. He served as a member of the NPS(National Pension Service) Fund Evaluation Committee from 2015 to 2018 and as a member of the Fund Management Committee — the pension's highest decision-making body — from 2018 to 2022. During his time at NPS, Lee made significant contributions to the introduction of the Stewardship Code and is known to have actively encouraged the asset owner to file derivative lawsuits. Governor Lee should consistently listen to the voice of the market and pursue global standards through active engagement with long-term investors, including foreign pension funds and sovereign wealth funds. It is important for the government to communicate its corporate governance reform roadmap to the global financial community. Given the impact of the Commercial Act amendments on shareholders, directors and companies, it is urgent that the FSS provide a clear guideline or a code of conduct. Furthermore, the value-up program — which famously started with a bang but ended with a whimper — should be reactivated with added enforceability, in our view.
Former FSS Governor Lee Bok-hyun, a prosecutor by background, actively worked to protect the rights of minority shareholders in the latter half of his term with an assertive approach. However, he left a significant blot on his legacy with the announcement of an all-out short-selling ban in November 2023. That single event caused a precipitous decline in confidence in the Korean government within the global markets, and that trust has yet to be fully recovered. It served as a clear lesson that a lack of communication with the market whether for a government or a corporation — can lead to significant key-man risk. In his inauguration speech on August 14th, Governor Lee stated, “To secure new national capabilities that lead the global market, all economic entities must be able to trust in the fair distribution of gains.” He added, “I will support the successful implementation of the Commercial Act amendments recently passed by the National Assembly to establish a system where the rights of both controlling shareholders and minority shareholders are respected equitably.” This demonstrates that he has an accurate understanding of the most crucial role FSS must play.
The better focus on voting by institutional investors is likely to emerge as Lee's crucial policy priority. An appointment as important and highly anticipated as the FSS Governor is that of the CEO of the NPS. Disappointingly, current CEO Kim Tae-hyun has been indifferent to capital market upgrades and corporate governance reform. The financial community has consistently compared NPS with Japan's GPIF, lamenting the NPS CEO’s perceived ineffective leadership. We urge the appointment of a reform-minded leader who champions shareholder rights and can spearhead capital market upgrades to lead the NPS.
August 19th, 2025
Korean Corporate Governance Forum
Chairman, Namuh Rhee
Momentum builds for corporate governance reform with Lee Chan-jin as new FSS Chief
Lee Chan-jin is expected to prioritize shareholder rights, good corporate governance, and stewardship code
We urge that new government appoints similar reform-minded CEO for NPS
Our Forum strongly supports the appointment of attorney Lee Chan-jin as the new Governor of the Financial Supervisory Service (FSS). While some local press dismiss him as not being a financial expert, we believe Lee is the ideal candidate to drive capital market upgrade and corporate governance improvement. To execute capital market reform with conviction, it may be preferable to appoint an individual from outside the financial sector who is free from conflicts of interest, rather than a bureaucrat or academic. Korea's banking system is relatively sound and its financial supervisory framework is well-established, arguably to an excessive degree. The Governor should focus on the capital market's fundamental problems, such as establishing a fair market order and resolving the issue of controlling shareholder’s abuse of power, rather than getting bogged down in these micro-level issues. According to his inauguration speech on August 14th, Governor Lee emphasized shareholder value-centric management and the establishment of a fair governance system. He is expected to use a "carrots and sticks" approach to ensure the successful implementation of Commercial Act amendments that passed the National Assembly on July 3rd.
He is likely to emphasize the accountability of institutional investors. The Governor's background provides strong evidence for this focus. He served as a member of the NPS(National Pension Service) Fund Evaluation Committee from 2015 to 2018 and as a member of the Fund Management Committee — the pension's highest decision-making body — from 2018 to 2022. During his time at NPS, Lee made significant contributions to the introduction of the Stewardship Code and is known to have actively encouraged the asset owner to file derivative lawsuits. Governor Lee should consistently listen to the voice of the market and pursue global standards through active engagement with long-term investors, including foreign pension funds and sovereign wealth funds. It is important for the government to communicate its corporate governance reform roadmap to the global financial community. Given the impact of the Commercial Act amendments on shareholders, directors and companies, it is urgent that the FSS provide a clear guideline or a code of conduct. Furthermore, the value-up program — which famously started with a bang but ended with a whimper — should be reactivated with added enforceability, in our view.
Former FSS Governor Lee Bok-hyun, a prosecutor by background, actively worked to protect the rights of minority shareholders in the latter half of his term with an assertive approach. However, he left a significant blot on his legacy with the announcement of an all-out short-selling ban in November 2023. That single event caused a precipitous decline in confidence in the Korean government within the global markets, and that trust has yet to be fully recovered. It served as a clear lesson that a lack of communication with the market whether for a government or a corporation — can lead to significant key-man risk. In his inauguration speech on August 14th, Governor Lee stated, “To secure new national capabilities that lead the global market, all economic entities must be able to trust in the fair distribution of gains.” He added, “I will support the successful implementation of the Commercial Act amendments recently passed by the National Assembly to establish a system where the rights of both controlling shareholders and minority shareholders are respected equitably.” This demonstrates that he has an accurate understanding of the most crucial role FSS must play.
The better focus on voting by institutional investors is likely to emerge as Lee's crucial policy priority. An appointment as important and highly anticipated as the FSS Governor is that of the CEO of the NPS. Disappointingly, current CEO Kim Tae-hyun has been indifferent to capital market upgrades and corporate governance reform. The financial community has consistently compared NPS with Japan's GPIF, lamenting the NPS CEO’s perceived ineffective leadership. We urge the appointment of a reform-minded leader who champions shareholder rights and can spearhead capital market upgrades to lead the NPS.
August 19th, 2025
Korean Corporate Governance Forum
Chairman, Namuh Rhee