Suseok Banggyeongman Selected as Final Candidate for Senior Vice President
Nomination Committee Evaluates Him as "Right Person to Lead Global Top Tier"
Challenges Include Declining Operating Profit and Controversies in Selection Process
KT&G has selected current Senior Vice President Bang Kyung-man as the final candidate for the next president. Similar to POSCO Group, which previously appointed former POSCO President Jang In-hwa as its next chairman, the company chose an internal candidate who is well-versed in the mid-to-long-term vision and current business issues, and has a high level of work understanding. Bang is regarded as the right person to lead growth through the three core businesses of global heated tobacco (CC), electronic cigarettes (NGP), and health functional foods while ensuring organizational stability.
Senior Executive Vice President Bang Kyung-man selected as the final candidate for KT&G's next president [Photo by KT&G]
Experienced and Expert 'Strategist'
The KT&G President Candidate Recommendation Committee (PCRC) held a meeting on the 22nd and confirmed Senior Vice President Bang as the final candidate for the next president, recommending him to the board. Earlier, on the 16th, the PCRC shortlisted four candidates for the second round, including Bang Kyung-man, former Samsung Electronics Vice President Kwon Gye-hyun, former AK Holdings President Lee Seok-joo, and KGC Ginseng Corporation President Heo Cheol-ho, two internal and two external candidates. After conducting in-depth face-to-face interviews with these candidates, Bang was selected as the final candidate. The final decision on Bang’s appointment as the next president will be made at KT&G’s regular shareholders’ meeting scheduled for the end of next month.
The PCRC explained that after thoroughly verifying and discussing the suitability of each candidate based on five key competencies?‘management expertise,’ ‘global expertise,’ ‘strategic thinking ability,’ ‘stakeholder communication skills,’ and ‘universal ethical awareness’?they reached a consensus that Bang possesses sufficient qualifications and capabilities as the next president and is the optimal candidate to clearly achieve the company’s future vision.
Bang graduated from Hankuk University of Foreign Studies with a degree in economics and earned a master’s degree in business administration from the University of New Hampshire in the United States. He joined KT&G’s predecessor, Korea Tobacco & Ginseng Corporation, through open recruitment in 1998 and has held key positions across the company, including head of the brand division, head of the global division, head of strategic planning, and business division leader. Alongside current President Baek Bok-in, Bang is one of the two inside directors on the board and currently serves as the general division head, overseeing KT&G’s overall business based on his extensive experience and expertise. He is also recognized as a ‘strategist’ for establishing mid-to-long-term growth strategies centered on the three core businesses through growth investments and technological innovation, and for playing a leading role in implementing new shareholder return policies.
Notably, during his tenure as head of the brand division, the launch of ‘Esse Change’ grew into the number one brand in the domestic market. As head of the global division, he led overseas market expansion by building customized brand portfolios for each market, increasing the number of countries where the company’s products are sold from about 40 to over 100.
The PCRC emphasized that Bang is considered the optimal candidate to leverage his insight into the overall business and overcome market limitations to help KT&G leap to become a ‘global top-tier’ company. They added, “The candidate’s capabilities and qualifications have been objectively verified through years of senior management development programs, and his demonstrated management skills as general division head, along with empathetic leadership shown in communication with various stakeholders, are sufficient to promote corporate growth and lead the group.”
Challenges Include Performance Recovery and Resolving Internal and External Conflicts
KT&G is appointing a new president for the first time in nine years. Baek Bok-in, who joined KT&G through open recruitment and served three consecutive terms since 2015, announced his intention to retire at last month’s board meeting, stating that “new leadership is needed for KT&G’s leap to a ‘global top-tier’ and transformation.” Bang, an internal candidate like Baek, who has reached the threshold of becoming the next leader, faces significant challenges.
One immediate issue is the criticism exposed during the selection process of the next president. Notably, activist fund Flashlight Capital Partners (FCP), which owns about 1% of KT&G shares, is preparing to file a lawsuit, claiming that KT&G’s current and former management caused nearly 1 trillion won in damages to minority shareholders to strengthen their control over the company.
They also criticized the president selection process as a “wordplay secret ballot.” In response, a KT&G official stated, “The president selection process is conducted fairly and transparently through a fully open recruitment system, reflecting the opinions of an external expert advisory group, and through the governance committee and president candidate recommendation committee composed of directors with expertise.”
Recently, FCP sent a letter urging the National Pension Service to actively exercise voting rights in KT&G’s president appointment. The National Pension Service is KT&G’s second-largest shareholder, holding 6.31% of shares as of the end of last September, following IBK Industrial Bank of Korea (6.93%). Additionally, there have been repeated expos?s, presumably from internal members, raising allegations of misconduct during former President Jeon Hyun’s tenure.
Improving profitability is also an urgent issue. KT&G’s consolidated sales last year reached a record high of 5.8724 trillion won, a 0.4% increase from the previous year, but operating profit was preliminarily estimated at 1.1679 trillion won, down 7.9%. The company’s operating profit has been declining for four consecutive years since 2020.
Bang said, “I feel a heavy responsibility as a candidate amid the company’s rapidly changing business environment. I will strive to lead innovation more proactively and seize future growth opportunities so that KT&G can leap to become a ‘global top-tier’ company.”
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