As the Sewol ferry disaster has exposed holes in the nation’s public safety system and broader problems in society, the fiasco at KB Financial Group has laid bare a host of flaws in Korea’s financial system.

The immediate cause of the crisis at KB was a boardroom feud that went out of control. What made it worse was lax regulatory supervision and a botched response, including several flip-flops over the level of punishment for the two top executives involved in the conflict.

The root cause, of course, is the revolving-door appointments, under which political appointees ― a friend of the president and a former vice minister ― successively took over the CEO post at the nation’s top financial group by assets.

On the surface, the strife between Lim Young-rok, the ousted chairman, and Lee Kun-ho, who resigned as head of the group’s flagship unit, Kookmin Bank, stemmed from Lim’s push to change the bank’s computer system.

Opposed to the change, Lee took the case to the Financial Supervisory Service, which, along with the Financial Supervisory Commission, behaved indecisively before handing out the strong punishment of suspending both of them.

Lee resigned from his bank post, but Lim, a former vice minister, remained defiant and filed an administrative suit to revoke the authorities’ decision to suspend him. The fiasco ended only when the group’s board, under mounting government and public pressure, dismissed the embattled chairman.

This raises questions about the board, which sat idle while the group was going through so grave a crisis. Among the board members, the finger should be pointed mainly at the outside directors.

Outside directors are installed to ensure management transparency, protect shareholders’ rights and prevent executives from making arbitrary decisions. This was not the case at KB.

One can determine why by looking at the backgrounds of the nine outside board members: They include former officials of the Finance Ministry, the FSS and the Bank of Korea and several university professors who are close to government officials and politicians ― eight of them went to the same university as the ousted chairman.

It would have been strange if the chairman had selected people who were not close to him. KB’s outside directors are appointed by a four-member panel consisting of the chairman and three outside directors. In short, they can make the board their own exclusive club.

No wonder the outside directors sided with Lim during the past five months when Lim and Lee were embroiled in an intense power struggle.

A bigger cause for concern is that these problems are not limited to KB. Many other financial groups and corporations install outside directors who lack professional qualifications simply because they are close to top executives, government regulators and politicians.

In the wake of the crisis at KB, financial regulators are drawing up guidelines for operating the outside director system, including the step of subjecting them to an inside evaluation every year and an outside evaluation every other year. Measures like these should have been taken earlier.

What should be noted before discussing such comprehensive guidelines for the outside director system is the absurd fact that the same directors who were part of the problem at KB are still empowered to appoint the new chairman. The leadership vacuum at KB Financial should be filled as soon as possible, but on the condition that it be done in a proper way and by the right people.