December 21 Last Year: First Meeting of HuChuWi Started
After 10th Meeting on 8th, One Final Candidate Confirmed
If Passed at Regular General Meeting Vote on 21st Next Month, Inauguration Follows
Jang In-hwa, former POSCO president, has been confirmed as the sole final candidate for the next chairman of the POSCO Group. If approved at the regular shareholders' meeting on the 21st of next month, he will officially assume the position as the next chairman at the board of directors meeting.
This selection of the next chairman was led by the CEO Candidate Recommendation Committee (hereafter referred to as the Recommendation Committee), composed entirely of seven outside directors of POSCO Holdings. Until now, the POSCO Group's succession council, consisting of inside and outside directors, discovered CEO candidates and recommended them to the Recommendation Committee. The Recommendation Committee's role was only to select one candidate from these nominees. Since the succession council included inside directors who were current executives, there were concerns about internal influence.
Also, when the incumbent chairman sought reappointment, they were given priority for review. After the CEO Recommendation Committee judged eligibility and recommended a sole candidate who then passed the shareholders' meeting, reappointment was confirmed. This sparked controversy as it was seen as no different from 'self reappointment.' In response, the POSCO Group held a board meeting in December last year and abolished the 'CEO Succession Council' and the 'priority review system for incumbent reappointment.' Although this was intended to enhance fairness, controversies surrounding the selection process continued.
First, the largest shareholder, the National Pension Service (NPS), publicly raised issues with the selection procedure. Kim Tae-hyun, chairman of the NPS, stated in an interview with a media outlet, “The appointment of the representative of POSCO Holdings, a company with dispersed ownership, should provide equal and fair opportunities to both internal and external candidates to maximize shareholder value, as was emphasized in the KT case.” Concerns were raised that a 'second KT incident' might occur, but the NPS did not make further comments afterward.
After procedural criticisms, trust issues arose regarding the Recommendation Committee members. It was revealed that POSCO Holdings Chairman Choi Jeong-woo and some outside directors on the Recommendation Committee spent 700 million KRW during a week-long business trip to Canada, drawing attention as a 'luxurious board meeting.' Subsequently, allegations targeting the Recommendation Committee, including POSCO Holdings' 'luxury villa,' surfaced.
At that time, Park Hee-jae, chairman of the Recommendation Committee, told Asia Economy, “The data is inaccurate and many details are unexplained,” but also said, “We humbly accept the criticisms from the public and media and will be more cautious and prudent going forward.” The police are investigating 16 people, including Chairman Choi and inside and outside directors, on charges of breach of duty or bribery following a complaint filed by the Pohang civic group 'POSCO Headquarters and Future Technology Research Institute Relocation Citizens' Committee' (the Committee) related to the 'luxurious board meeting.'
There were also allegations of illegal interference by the current management. The Committee recently filed a complaint with the Seoul Metropolitan Police Agency, claiming that Chairman Choi illegally visited the Recommendation Committee meeting room on the 31st of last month during the candidate selection process and interfered with the candidate selection. It was alleged that Chairman Choi demanded the exclusion of certain candidates, and the Recommendation Committee adjusted the candidate pool accordingly. POSCO Holdings denied these claims as 'rumors' and warned of strong legal action.
Speculation ran rampant. Kim Dong-seop, president of Korea National Oil Corporation and one of the six final candidates, was accused of being a parachute appointment because he attended the same high school as Lee Gwan-seop, chief of staff at the presidential office. Kim dismissed the allegations in an interview with Asia Economy, saying, “I do not know him at all and have no idea who he is.” At the end of last year, rumors circulated that former presidential secretary Kim Dae-gi was involved in the POSCO chairman selection, prompting Kim to directly request a police investigation.
Jang In-hwa, former POSCO president, selected as the final candidate for the next chairman of POSCO Group [Photo by POSCO]
The Recommendation Committee began its first meeting on December 21 last year and held relay meetings day and night, including weekends. Chairman Park said, “Since members have their own duties, it was difficult to gather all at once, so we often held late-night meetings.” The second meeting was held on the 28th, and after the third meeting on the 29th, CEO candidate recommendations were requested from shareholders and 10 search firms.
At the fourth meeting on January 3, eight internal candidates were selected and reputation checks requested. At the fifth meeting on January 10, 15 candidates were chosen from 20 external nominees. Then, at the sixth meeting on January 17, a long list of 18 candidates (6 internal, 12 external) was finalized, and at the seventh meeting on January 21, a short list of 12 candidates (5 internal, 7 external) was determined.
On January 31, the eighth meeting was held, and six finalists (3 internal, 3 external) were confirmed and the list was publicly disclosed for the first time. The finalists were Kwon Young-soo, former vice chairman of LG Energy Solution; Kim Dong-seop, current president of Korea National Oil Corporation; Kim Ji-yong, current head (president) of POSCO Holdings Future Research Institute; Woo Yoo-cheol, former vice chairman of Hyundai Steel; Jang In-hwa, former POSCO president; and Jeon Jung-seon, former POSCO Holdings president.
In-depth interviews were conducted over two days starting on the 7th of this month, and on the 8th, former president Jang was confirmed as the sole final candidate and publicly announced.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
