"We must select a capable expert who has the four elements of telecommunications, artificial intelligence (AI), management, and policy." (Democratic Party of Korea lawmakers Kim Woo-young, Hwang Jeong-a, and Lee Joo-hee)
"KT needs a new president who can turn the company around, but figures from the Yoon Suk-yeol administration are scrambling." (Democratic Party of Korea lawmaker Lee Hoon-gi)
A heated debate is unfolding in political circles over KT, which is proceeding with the process of appointing its next chief executive officer (CEO). Since its privatization in 2002, KT has been dogged by parachute appointment controversies as a "company without an owner." This time, controversy has arisen over the board's overreach of power and legitimacy in the CEO selection process. Experts warn that if the current board leads the CEO selection process, external pressure will inevitably intensify and, in the worst case, a repeat of the management vacuum from two years ago could occur.
On the 27th, Democratic Party of Korea lawmakers Kim Woo-young, Hwang Jeong-a, and Lee Joo-hee, who sit on the National Assembly's Science. ICT. Broadcasting. and Communications Committee, issued materials urging KT, ahead of choosing its next CEO, to "immediately end faction-driven personnel practices and select a competence-centered, innovative leader." The same day, Democratic Party of Korea lawmaker Lee Hoon-gi of the Science. ICT. Broadcasting. and Communications Committee, along with civic groups including the Public Transport Workers' Union Broadcasting and Communications Council and the KT New Union, held a press conference at the National Assembly's Communication Center calling for a transparent selection of KT's CEO.
KT New Union Chairperson Kim Mi-young also said at the press conference, "The current directors appeared after two candidates resigned during the CEO selection process three years ago and then the then outside directors resigned en masse." This refers to seven of the eight outside directors appointed two years ago. In early 2023, former KT President Koo Hyun-mo and former KT Head of Group Transformation Yoon Kyung-rim (president) voluntarily withdrew from candidacy for the next CEO due to opposition from the National Pension Service and political circles, after which many outside directors expressed their intent to step down. The seven current KT outside directors were appointed at that time. For this reason, there is considerable sentiment that the current board was, from its inception, influenced by political circles.
From its composition, the current KT board, which drew deep suspicion, has invited questions over legitimacy by showing a self-imposed overreach of power. There are no experts in AI, telecommunications, or security on the KT board. Nonetheless, for the four directors whose terms expire early this year, the board merely went through a formal open recruitment process and then re-recommended all of them. In addition, earlier this month the board revised regulations to require that, if the CEO carries out personnel moves at the division-head level or major organizational reshuffles, the CEO must undergo prior discussion with and approval by the board. Kim Jun-ik, a professor of business administration at Konkuk University, said, "For KT to pursue sound development, the board must be reorganized into a structure with expertise, and transparency must be strengthened throughout the candidate selection process," adding, "It should be keenly recognized that a selection process led by a board lacking legitimacy can ultimately block the participation of capable leaders and lead to weakened competitiveness for corporations."
If the current board is replaced, a management vacuum could occur. In that case, a board categorized as being staffed with figures close to the Lee Jae-myung administration could be formed. Even so, experts say that unless there is change in the current board, external pressure on the CEO selection process will only intensify. Meanwhile, KT's executive appointments are also being repeatedly delayed. Last year, KT's executive appointments took place in November.
Han Young-do, chairperson of the K-Business Research Forum, said, "If the board does not voluntarily step down, KT will end up just stalling for time until next March, when the terms of four of the eight directors expire, and in the worst case a management vacuum could be replayed due to external pressure." Hwang Yong-sik, a professor of business administration at Sejong University, said, "Because it will be difficult for stakeholders to accept a CEO chosen by a board without legitimacy, time will only be wasted unless a board replacement takes place."