Kwon shakes up POSCO board
By Kim Tae-jong
POSCO CEO Kwon Oh-joon
Kim Jin-il, president of POSCO Chemtech
Lee Young-hoon, vice-president of POSCO Engineering
Yoon Dong-joon, POSCO executive vice-president
POSCO’s new Chairman Kwon Oh-joon has taken the first step to overhaul the world’s fifth-largest steel maker by reshuffling its board members and establishing a risk-management entity.
POSCO announced Monday it has selected candidates for new board members and outside directors who will replace most of the existing members.
The new CEO decided to set up the so-called “value management office” upon his inauguration, which will be in charge of corporate restructuring and risk management.
It was the first step that Kwon has taken to reform the company under his leadership.
According to the firm, it will replace four out of five board members and select three new outside directors
.
Candidates for board members are POSCO Chemtech President Kim Jin-il, POSCO Engineering & Construction Vice-president Lee Young-hoon and POSCO Executive Vice-president Yoon Dong-joon.
Kim was one of five candidates who made it to the shortlist for the top position, who competed with Kwon.
“This is the first time since the firm’s foundation that all board members have worked for companies that invested in POSCO. It is expected that board members will better understand each other,” the company said in a statement.
Candidates for outside directors are Kim Il-sup, president of the Seoul School of Integrated Science & Technologies; Seon Woo-young, a lawyer at Rhi & Partners
;
and Ahn Dong-hyun, a professor at Seoul National University.
The nominees for the board and outside director posts will be reviewed by the Board Member Selection Committee and be confirmed at a shareholders’ meeting on March 14.
Kwon will also formally be named CEO the same day, replacing outgoing Chung Joon-yang.
The drastic changes on the board indicate that Kown is desperate to overhaul the organization to address numerous challenges, such as improving corporate efficiency and finding new growth engines.
Insiders believe that Kwon is very determined to reform the company to better cope with industry wide difficulties such as growing competition from China and sluggish global demand for steel products.
“Kwon wants to reform the firm to put the brakes on reckless management and improve effectiveness, and also do better in risk and cash flow management,” a high-ranking official from the firm said.
Other sources said the company will also discuss the merger of major business departments such as production, accounting, planning and marketing.
The reform measures including the management reshuffle are critical for Kwon to tackle various challenges.
First of all, he needs to improve profitability.
Operating profit dropped to 2.8 trillion won last year from over 5 trillion won in 2010, but the total amount of loans soared to 30.6 trillion won from 24.1 trillion won in 2012.
He also has to improve the performance of non-steel businesses that his predecessor initiated.
Apart from business, Kwon is also seeking to gain independence from the government’s influence. It has been alleged that all the CEOs were pressed to step down whenever a new administration took office.