Meet the new boss

The government has finally got around to appointments in public companies. The new administration has been in office for six months, but has not even finalized the replacements of chief executives in public-sector corporations. Now it is hastening the process. While it was dragging its feet, the public sector was in disarray.

A former senior bureaucrat eyeing the chief executive post at a public enterprise was busy campaigning recently. He believed the appointment was his because he knew a senior presidential aide. He had firm confidence that the aide would put in a good word for him. But his connection recently lost his job. Now he is running around furiously lobbying to get his name on the candidate list. When asked why he was applying for the job, he gave the lame reply that he was bored sitting around at home. When asked about his management vision, he said he could do what anybody else could do.

An executive at a public corporation who hoped to be promoted to a vice presidential post is in despair. After a new chief executive came in, he got demoted instead of being promoted. He had made the rounds hoping to get his prayers answered from people in the administration and politicians. He was entirely preoccupied with lobbying for his new title. He worked hard for it but was unsuccessful. In his degraded post, he is determined to endure for three more years. He vows a new, more successful attempt after the current president steps down.

Another chief executive of a public corporation is frustrated by the mess his predecessor left behind. The company has built a joint-venture factory overseas. But the overseas venture turned out to be a money-loser. His predecessor enjoyed luxurious business trips visiting that overseas operation. The company received good press because the project was sold as a good one. The new head discovered the truth was the absolute opposite. He had to decide whether to end it and incur huge losses. He doesn’t think he should be held accountable since it was his predecessor’s doing. Or should he invest more to turn it around? That would be highly risky because the results won’t show immediately and he could get a poor performance review.

The ability to play politics is often a greater asset than being able to land a chief executive post. Those who lobby well have a better chance of getting promotions than those who work hard. Once at the top, he or she runs businesses that can generate immediate results and score well with high-ranking government officials. The practice is rampant in public enterprises. As a result, the public sector is losing money at the expense of the taxpayers.

The venerable conflict in Miryang, South Gyeongsang, over the construction of high-voltage transmission towers stems from a similar problem in public enterprises. Power transmission is the primary work of the Korea Electric Power Corporation since the company has outsourced power generation to its subsidiaries. Kepco has been building transmission towers and lines for all of its corporate life. But never has it stumbled upon such strong resistance from residents as in Miryang. Is it because the residents are particularly picky and health-conscious? Or is it because they were brainwashed by anti-government activist groups?

I believe it has little to do with either of these factors and has more to do with a CEO who is ignorant of the company’s primary business. He shut down the department of power transmission, and the business was scaled down and even placed under another department. The company then focused primarily on overseas projects, an emphasis that trickled down to the lower hierarchy. In the past, officials would sit down with elderly and senior residents over drinks whenever there was some disagreement with the public and tried to get them to see Kepco’s view. But none of that groundwork took place in Miryang.

The solution is simple: Place a competent figure in Kepco’s executive seat and keep him or her in the post for a while. Then its management won’t pursue immediate results and instead work on long-term business plans. That is how the private sector runs its business. The capable get promoted, even the chief executive.

The public sector should follow the same model. A capable president should be able to work longer regardless of changes in the administration. Three years isn’t enough to run a modern business because results don’t show for five years. The most important guideline in appointments should be capability. The presidential office must be well aware of that. I want to believe that’s why it’s dragged its feet on appointments for so long.

*The author is an editorial writer of the JoongAng Ilbo.

By Kim Yeong-ook