[Viewpoint] What’s the right age to retire?

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[Viewpoint] What’s the right age to retire?

The legendary 16th century Japanese warlord, Oda Nobunaga, who unified Japan, often recited the song from a samurai play called “Atsumori.”

His favorite lyrics go like this: “Human life lasts only 50 years/Contrast human life with life of Geten (an imaginary world in Buddhist scriptures where life goes on for 8,000 years)/it is but a dream and illusion./Once life is given, there is no such thing that doesn’t perish.”

The verse epitomizes a short but regretful life envisioned by the shogun who coincidentally died at the age of 49.

In today’s world of medical technology, however, a human life on average lasts around 70 to 80 years. In fact, there are many around us who can capitalize on their knowledge and wisdom in their fields even after retirement. Many in their 80s are as active as those in their 60s, offering a role model to those preparing for their retirement years.

In contrast to this trend, the financial industry has decided to place an age limit on executives. In board meetings last week of financial groups discussing chief executives, age was an issue. Hana Financial Group decided that no board member should be older than 70.

In the corporate sector, however, there are many veterans at a ripe old age who are still very active. Most are company owners to whom age limits and retirement do not apply.

Financiers are different. It would be unfair if age was an issue with the financial industry, unlike the nonfinancial sector. Capabilities, not age, should be the yardstick used for executives in this aging society.

The matter is a sticky issue in other economies. Some have age limits and some don’t. Germany’s auto parts group Bosch, for instance, has had only six chief executives since its founding in 1886. The average tenure was more than 20 years. The current chairman, Franz Fehrebach, 61, took office in 2003. If he lasts as long as his predecessors, he will remain in office until 74.

The age limit issue came up after the much-publicized feud at Shinhan Financial Group. The group’s chairman, Ra Eung-chan, served four terms and led the financial group after first becoming chief executive of Shinhan Bank in 2001. Many blamed Ra’s long-term dominance of the bank’s affairs for the power struggle.

This example has persuaded those in the banking industry to consider age limits, with Hana Financial Group becoming the first to draw the line and others likely to follow.

But the age limits can be a double-edged sword. It contains a double meaning depending on which way one looks at it. It could mean the office term ends at 70, but it can also serve as a guarantee that an executive can remain in office as long as he wants until he is 70. But in positions other than executive ones, the age cut-off is normally 50.

The 20-year difference this represents is too much of a gap in terms of values and mind-set. Communication between management and the rest of the workforce could suffer as a result. It could develop into a problem given the quick changing nature of the financial sector nowadays.

There is only one solution here - a Hollywood-like ending of riding into the sunset. Japanese author and business management professor, Hiroyuki Itami, said the best time to step down was when one had a reliable successor and was still revered by many.

A little too soon is the best time to make an exit, otherwise it may turn out to be too late to wait for the scheduled climax.

Shinhan’s former chairman, Ra, missed his timing to get on his horse and ride into the sunset.

Itami cited three factors that can muddle the judgment of a man in power - age, success and greed. Age wears one out and success is addictive, fueling the greed to cling onto power.

Greed had a most ugly effect when it came to Ra. The Chinese character “power” contains the meaning “temporary.” Power is fluid and does not stay with one for long. It applies to anyone who is on the high horse right now.

*The writer is a senior business writer of the JoongAng Ilbo.

by Nahm Yoon-ho
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