KT to overhaul CEO selection process amid NPS opposition

The Korea Times

The Korea Times

Business

Tue, October 3, 2023 | 05:37

KT to overhaul CEO selection process amid NPS opposition

Posted : 2023-02-09 16:42

Updated : 2023-02-10 14:30

Ku Hyeon-mo, CEO of KT, speaks during the company's New Year's ceremony at its office in Songpa-gu, Seoul, Jan. 2. Courtesy of KT

By Baek Byung-yeul

KT will change its CEO selection process with an open primary system, after the telecommunications company became embroiled in controversy over its board members' decision to reappoint the incumbent CEO Ku Hyeon-mo, according to the company, Thursday.

The company's board members held a meeting and decided to screen the candidates for the next CEO again in an open primary system.

Previously in December, the board members announced their recommendation of Ku as the final and sole candidate to lead the company for the next three years, but the National Pension Service (NPS), a major shareholder with a 9.99 percent stake, opposed the decision on the grounds of fairness in the selection process.

"To meet the direction of improving the governance structure, demanded by major stakeholders, CEO Ku expressed his intention to compete openly again without insisting on the right to be the next CEO," the company said is a statement. "The board members decided to overhaul the CEO appointment process after in-depth discussions."

The company will recruit CEO candidates from Friday to Feb. 20. Qualified applicants will have abundant knowledge and experience in management and the economy and have successful experience in corporate management, KT said.

To improve transparency in the selection process, the company will form an advisory group comprised of industry experts in economic, leadership, investment, law and insights of future prospects of industries.

After being approved by the board last December, Ku was only required to receive approval at the company's shareholders' meeting in March to serve his next three-year term.

However, the NPS has publicly raised questions on the procedure and opposed Ku's second term.

"It (the procedure) did not meet the basic principle of the primary that the decision on the CEO candidate should be made in accordance with transparent and fair procedures," Seo Won-joo, chief investment officer, said in December.

KT's move to revamp the appointment process can be interpreted as taking into consideration political concerns, even though it has been over 20 years since it was privatized in 2002.

Meanwhile, the country's No. 2 mobile carrier announced its 2022 fourth-quarter earnings on the same day. It said its operating profit was 1.69 trillion won ($1.34 billion), up 1.1 percent year-on-year, proving that it has successfully transformed as a digital platform company providing cloud computing and digital media services.

baekby@koreatimes.co.kr