Shinhan Investment Corp. announced on the 22nd that if an internal control issue occurs, it would deduct bonuses from all former executives. After experiencing a liquidity provider (LP) loss incident of around 130 billion KRW involving exchange-traded funds (ETFs) last October, Shinhan Investment went into emergency management mode.
This decision reflects a strong declaration of collective responsibility, moving away from the previous practice of holding specific executives accountable to having all company executives share the burden when internal control issues arise, according to Shinhan Investment. Executives related to internal control are excluded due to the nature of their work.
Department assessments will also be centered on internal control. The weighting of internal control in evaluations has been significantly increased, and even if other evaluation scores are favorable, a lack of internal control can lead to a downgrade to the lowest performance ratings.
Shinhan Investment explained that the introduction of this system is part of their commitment to strengthen internal control not just as a slogan but as a reality linked with evaluation and compensation.
Additionally, to emphasize the importance of middle and back office roles related to internal control, the company has introduced a new “Internal Control Platinum” category in its year-end performance evaluation awards for outstanding departments and employees.
Previously, under its emergency management mode, Shinhan Investment operated a crisis management and normalization task force (TF) and set various tasks related to internal control, organizational culture, and human innovation for the first quarter of this year.
Lee Sun-hoon, CEO of Shinhan Investment Corp., stated, “We will continue to actively implement measures to strengthen internal controls with the belief that we need to address even invisible potential risks to restore trust.”