Woori adopts Samsung culture index for internal controls

Woori Financial Group has adopted Samsung Electronics Co.'s Samsung Culture Index (SCI) to tighten its internal controls, which will be given more weight in the evaluation of South Korean financial services companies.

South Korea’s No. 4 financial services group is set to launch the Woori Organization Health Index (W-OHI), benchmarking the SCI for its culture assessment, according to Woori officials on Monday.

The SCI is based on an annual survey of all Samsung Electronics' employees around the world to identify the company's strengths and weaknesses. The index focuses on work engagement, team collaboration and company pride.

For the W-OHI, Woori plans to complete the survey of all employees at its 15 units, ranging from banks to brokerages and private equity firms, by the end of this month. It will then implement measures tailored to each company to improve their internal controls and corporate culture starting next month.

This marks the first time that Woori Financial Group will conduct such a comprehensive survey of all its subsidiaries with an aim of reforming their corporate culture.

Questions for the survey include those about the fairness of human resource management, satisfaction with corporate culture and views on whether innovation projects they were assigned to are deemed appropriate or not.

“We are also planning to prepare measures to prevent incidents and accidents caused by poor internal controls,” said an official at Woori Financial Group.

In 2022, a loan officer at Woori Bank’s main office was found to have embezzled a total of 69.7 billion won ($50 million) over a period of eight years until mid-2020, according to the regulatory Financial Supervisory Service (FSS).

The same year, the bank was ordered to suspend private equity product sales for three months, along with other domestic banks, in the aftermath of a massive financial fraud scandal at asset management firms in the country.

The FSS will add internal controls as a separate evaluation factor for financial services companies from this year. It will significantly increase their proportion from 5.3% to 15% in its examination of those companies.

“We plan to introduce new supervisory tools to lead a more fundamental change in banks’ organizational culture,” Lee Bok-hyun, governor of the FSS, said last week.

Other financial groups are also preparing measures to tighten internal controls.

“We will unveil drastic measures such as putting a chief risk officer at the forefront of our management, or establishing a control tower for contingency plans within the group,” said an executive at a domestic financial holding company.

Write to Jae-Won Park at wonderful@hankyung.com

Yeonheen Kim edited this article.