The ratio of non-Korean chief financial officers (CFO) at Korean-run financial institutions are continuously getting larger.
Four of seven Southern California-based Korean banks are employing CFOs who are not ethnic Koreans. Bank of Hope and Hanmi Bank, two of the community’s largest banks, are both led by Douglas Goddard and Romolo Santarosa, respectively. At CBB Bank, Michael McCall is its CFO while US Metro Bank filled the position with Robert Vecci.
Only Pacific City Bank (Timothy Chang), Open Bank (Christine Oh) and Uniti Bank (Andrew Chung) have designated Korean-American financiers as CFOs.
A CFO’s primary role is to play a prominent role beyond financial management as it delves into strategic planning and risk management. Other major tasks such as merger and acquisition and investor relations are also often conducted by a CFO. In other words, the importance of a CFO’s role only becomes larger as the bank grows.
There are several reasons as to why Korean banks are employing hiring CFOs outside of their community. Financiers in the industry say that is due to better investor relations, preference for CFOs with larger network, lack of support from the management and poor development of ethnic-Korean CFOs.
Among those, the biggest motivation behind Korean banks’ search of a figure outside of their community is the demand for someone with a well-rounded background in the financial industry to explore opportunities in the stock market.
Investor relations only become more important in the stock market and it is imperative banks to be led by a CFO who can communicate flawlessly with a comprehensive understanding of the industry.
Even for banks that have not gone public, hiring a CFO with rich experience in the industry is vitally essential. While it is important for ethnic institutions to hire chief commercial officer (CCO) who is familiar with the community’s culture, the position of a CFO does not necessarily require the same level of cultural understanding.
“A Korean candidate who’s bilingual and is familiar with the Korean culture would obviously have an advantage to fill in such a role,” said a bank employee in Koreatown. “But it’s difficult to find someone with those conditions in this business.”
However, critics argue that the lack of talent pool has more to do with banks focusing on short term plans than investing in growth of individuals for the long term.
“There have been many 1.5 or second generation Korean-Americans entering this business,” said another bank employee. “It’s necessary for them to be given chances to prove themselves in their community.”
By Sung Cheol Jin