KT will proceed with the appointment process for Park Yoon-young, the final candidate for the next KT CEO, at the regular shareholders' meeting for 2026 at the end of next month. Park is currently preparing to take office, having set up an office near Gwanghwamun in Seoul. Meanwhile, the National Pension Service, the second-largest shareholder holding 7.05% equity in KT, changed its purpose for holding the stock from "simple investment" to "general investment." This means it intends to engage in active shareholder activities rather than exercising only the minimum rights as a shareholder. Will the National Pension Service's move help or hurt the Park Yoon-young leadership?
At first glance, it may look like a move to voice opposition to Park's taking office. That appears more harmful than helpful. The National Pension Service expressed opposition to former KT Presidents Koo Hyun-mo and Yun Kyung-lim during the 2023 KT CEO selection process, and their appointments subsequently fell through. A corporate governance expert said, "Judging from past precedent, KT is a private company, but there would have been a candidate recommended by the government side at the time the final candidate was decided," adding, "Practically speaking, there is a heavy burden to shake things up with just a month left before the shareholders' meeting."
From Park's perspective, the KT board is a grateful body that backed him for CEO. However, the rules the current board has changed are certain to become obstacles to management activities going forward. For this reason, those familiar with KT's internal situation say there is widespread interpretation that the National Pension Service's exercise of shareholder rights could serve as a support force for Park.
Park is expected to carry out executive appointments and a restructuring immediately after taking office at the end of next month. Initially, there was an attempt, through coordination between KT President Kim Young-shub and Park, to move up the executive appointments and restructuring, but this reportedly fell through.
That said, from Park's standpoint, it is quite burdensome that in Nov. last year the KT board revised regulations to require prior discussion and a vote by the board whenever the CEO carries out personnel actions at the institutional sector head level or major organizational restructuring. If a structure takes hold in which the board rejects the CEO's major decisions, it would create a framework in which the directors control company operations. Moreover, at a time when stories are circulating that an outside director, identified as L, used that position to solicit the role of head of corporate strategy, overseeing the strategy office and finance office at KT, and exerted pressure to invest in a German satellite communications company called Rivada, the board's excessive authority is a top priority Park wants to change.
Experts also say a company's articles of incorporation are based on the Commercial Act, which is a higher-level concept than board regulations, so getting board approval for restructuring is not standard practice. A KT executive said, "There is a consensus that the procedure of having the board approve restructuring must be reversed," adding, "If Park tries to change this after being appointed, it could take a long time and face strong pushback."
This aligns well with the government's interests. KT currently has seven outside directors. During the process of replacing former CEO Koo Hyun-mo in 2023, seven of eight outside directors resigned en masse. Of the seven current outside directors, six were appointed under the Yoon Suk-yeol administration. At the shareholders' meeting in Mar., the terms of three—Choi Yang-hee, Hallym University president; Yoon Jong-soo, former Vice Minister of the Ministry of Environment; and Ahn Young-gyun, director at the International Federation of Accountants (IFAC)—will expire. In addition, with former KT outside director Cho Seung-ah stepping down for holding concurrent positions in violation of rules, four new outside directors are set to be appointed.
The remaining four outside directors are not without controversy either. Early last year, the KT board re-recommended all four directors whose terms expired—Gwak Woo-young, former head of vehicle IT development at Hyundai Motor; Kim Sung-cheol, professor at Korea University's School of Media; Lee Seung-hoon, a private member of the Korea Investment Corporation (KIC) Operations Committee; and attorney Kim Yong-hyun—after only a formal open recruitment process. This sparked "self-renewal" controversy. An industry official said, "From the government's standpoint, it would want the four outside directors to be people to its liking, and even if the four are replaced, it would likely want to replace the remaining four as well."
In Dec. last year, President Lee Jae-myung, during a briefing on National Pension Service affairs, mentioned the stewardship code (a system that allows pension funds to intervene in corporations' decision-making) and said, "We must actively exercise voting rights on the stocks we hold," adding, "Even without micromanaging corporate management through voting, shouldn't we at least exercise minimal control to prevent strange things from happening?" The National Pension Service recently visited KT and, according to reports, asked about the appropriateness of the board rule amendments that mandated board approval for restructuring and executive appointments, and whether they could infringe on governance and shareholder rights.
Of course, that does not mean the National Pension Service's entry will be purely beneficial. In the past, the National Pension Service did not receive positive evaluations when it spoke out as a major shareholder of KT. If the National Pension Service plays a meddling role after Park is appointed CEO, it could create an unwelcome situation.
Regarding the change in purpose for holding KT stock, the National Pension Service said it is "difficult to answer questions about specific issues concerning individual stocks." Ryu Young-jae, CEO of Sustinvest, said, "This is interpreted as a move by the National Pension Service to actively exercise shareholder rights," adding, "It is seen as a check on outside directors who have begun involving themselves from personnel authority to organizational restructuring."