[Viewpoint] Wherefore art thou, KB chairman?

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[Viewpoint] Wherefore art thou, KB chairman?

The topic over dinner finally turned to the vacant chairman’s seat at the KB Financial Group. “What kind of person should he be?” someone asked. A person with high moral standards, one guest replied. Others suggested a penchant for reform and vision.

“So who is best qualified?” Guests rolled their eyes and kept their mouths shut.

The attendees of the dinner were former executives of KB Financial, financial authorities and senior government officials. They are acquainted with every big fish in the financial industry.

Yet they failed to come up with a candidate with the necessary experience, skills and sensibility to best run the country’s largest commercial lender. In the end, we decided to move on to the second-best list.

We got down to two names and parsed the candidates’ qualifications. One person was powerful with patrons in high places. He was close to many top policy makers in the government and ruling political party. The other person was considered because he too wouldn’t be black-balled by the Blue House. He would also be agreeable to the public.

But expertise was not a consideration, nor such qualities as high moral standards, reform-mindedness or vision. After a short silence, I raised that point and everyone started to laugh.

I couldn’t let the issue go. We all agreed to think up ways to select the best candidate for the post. A former KB executive proposed public recruitment. As a matter of fact, the core of the financial group’s problems lies in the fact that its chief executive is selected by outside directors behind closed doors.

“There is the element of government arm-twisting,” said one guest. “But the fundamental reason for controversies over past chief executives is the fact that the position is filled by a bunch of men behind a curtain. So candidates strive mightily to win the votes of outside directors.”

To avoid such problems, recruitment by a public process would be the best way. It also would leave no room for government involvement.

A senior financial official came up with the second idea of finding the right person for the job by eliminating unsuitable candidates.

The first to go would be someone from the government, as that could lead to charges of government meddling.

Candidates from inside the company also had to be ruled out. The KB Group’s biggest challenge is to break up the factionalism bred from mergers. Nearly a decade has passed since Kookmin Bank and Housing and Commercial Bank merged, but factional feuds still prevail. The best candidate to wipe out factional struggles would be someone neutral.

Candidates with former business dealings with KB Financial also had to be eliminated as it would be difficult for one of them to initiate reforms if he were too familiar with the executives in the bank.

A senior government official then spoke up. He said timing would be a key factor, arguing that the chairman’s post should be filled before the June 2 gubernatorial elections. Payback time follows elections.

The losers among the big guns could be rewarded for their campaign endeavors. There would be no better payback than KB Financial’s top job.

Rumors are already spreading in the industry that an influential political figure running in the elections has already been promised the KB seat if he loses. They say that’s why the KB chairman’s post has been left vacant for nearly six months.

The conclusion of the dinner guests was that KB Financial needs an imported manager like Guus Hiddink to overhaul the group.

The football coach who led the South Korean national team to fourth place in the 2002 World Cup is famous for requiring his team members to drop honorifics in addressing one another as part of an effort to eradicate factionalism.

An outsider has no reasons to pay back anyone, favor people, or oblige government demands. A person who has already experienced the best the industry has to offer would know how to get to the top.

If KB Financial aspires to join the top ranks of the industry it needs a foreign expert to lead the way.

Wall Street is shedding executive jobs. Now is a great time to grab a competent financier. An official from a foreign head-hunting firm says many foreign financiers are interested in the Korean market. Language should not be a problem since there are many who have worked in Korea before.

KB Financial holds a board of directors meeting this week. It is the first meeting since many of the outside directors have been replaced. Naming a new chairman is not on its agenda yet. The board should consider when and how to fill the seat as their top priority. They are already way behind.

*Translation by the JoongAng Daily staff.
The writer is a business editor at the JoongAng Sunday.

By Yi Jung-jae
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