2023-12-28 12:19:06
Kim Tae-hyun, Chairman of the National Pension Service, is responding to the National Assembly Health and Welfare Committee’s audit of government affairs on October 20. / Yonhap News
Kim Tae-hyeon, chairman of the National Pension Service, raised an issue with regard to the selection process for the next chairman of POSCO Holdings, saying, “Fairness and transparency must be increased.” POSCO’s ‘CEO Appointment Regulations’, which were revised on the 19th, were created to favor the ‘self-reappointment’ of current Chairman Choi Jeong-woo. The business community and financial markets are interpreting this as “the National Pension Service, a government agency, expressing its opposition to Chairman Choi’s reappointment.” As of last month, the National Pension Service was the largest shareholder of POSCO Holdings, holding a 6.71% stake.
In a phone call with our newspaper on the 28th, Chairman Kim said, “The appointment of the CEO of POSCO Holdings, a company with dispersed ownership (a company without a major shareholder), must be given a fair opportunity without discrimination between insiders and outsiders so that shareholder profits can be maximized, as stated in the KT case.” “Shareholders, investors, and the market will appropriately determine whether POSCO’s CEO Candidate Recommendation Committee (recommendation committee), which consists of only outside directors, is fair and can sufficiently represent shareholder interests,” he said.
Previously, POSCO Holdings abolished the priority review system for reappointment of the incumbent chairman and launched a CEO follow-up committee. However, there was controversy in the industry that the governance structure was reformed for show. This is because all seven outside directors who make up the Pochu Committee were appointed or reappointed during Chairman Choi’s tenure, so there is a lot of room for Chairman Choi’s influence to influence them.
Also, previously, the incumbent chairman was required to announce whether he would be reappointed 90 days prior to the general shareholders’ meeting, but with this rule now being abolished, Chairman Choi was naturally included in the first round of candidates (long list).
The Fuchu Committee plans to select the first round of candidates from internal executives, including incumbent Chairman Choi, and external recommendations, without a separate recruitment process or advisory group. Afterwards, through internal screening, a ‘short list’ of around 4 to 5 people will be condensed into a ‘short list’ of around 4 to 5 people at the end of January next year, and a ‘final list’ of 2 to 3 people will be condensed into a ‘final list’ of 2 to 3 people in February, following which an in-depth interview will be held and the final person who passes will be appointed to the board of directors as the next chairman. It is recommended. Since this entire process is scheduled to be conducted in secret, there is criticism that it is a ‘blind’ review.
As the National Pension Service raises issues in this regard, the possibility that the process of selecting the next chairman of POSCO Holdings will return to square one cannot be ruled out. Previously, during the election of KT’s chairman in the first half of this year, the National Pension Service, the largest shareholder, raised an active voice by officially opposing the reappointment of former CEO Koo Hyun-mo, and KT increased transparency through public offering and external appointments.
This is also deeply related to the current government’s philosophy. At the end of January this year, President Yoon Seok-yeol pointed out, “For companies that were public enterprises (like KT or POSCO) and then were privatized and their ownership was dispersed, the procedures and methods for forming the governance structure must be fair and transparent.”
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