Punching holes in parachutes

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Punching holes in parachutes


Yi Jung-jae

We should have known it when Deputy Prime Minister Hyun Oh-seok dropped this telling line in December: “Not all golden parachutes are bad.”

This government has no intention of ending the tradition of rewarding people who helped the president and party by sending them off on a parachute into high-paying executive positions in public enterprises. It could not have been a slip of the tongue because the deputy prime minister in charge of the economy made the comment while answering journalists’ questions about the government’s policy on appointments of new chief executives in a press conference announcing actions to normalize and improve management at heavily indebted public corporations.

Still, people thought President Park Geun-hye may be different as she had been critical of the practice of public companies being headed by outside figures close to the former government, such as that of President Lee Myung-bak. We are already well into the first quarter, and yet we have not heard anything or witnessed any changes in the government’s stand on revolving-door or parachute appointments. President Park, who previously criticized the long tradition of favoritism in CEO appointments in the public sector, may be choosing to hide her head in the sand and pretend not to notice. I have been protesting the practice of CEOs and auditors coming in via parachutes in my writings in the past. My complaints may have not reached the Blue House.

I repeat my position once more. The government must stop mixing politics with appointments if it is serious about reforming public corporations. Reforms could start and end with doing away with that wasteful tradition. The exchange of top executive seats as rewards for political loyalty breeds factionalism and corruption. No one will sit around and tolerate unqualified people easily landing jobs in high-paying and reputable executive positions when jobs are becoming scarcer amid a rapidly aging society and a slow-moving economy. The age range of candidates vying for top posts in public companies, which used to be men in their 50s, has widened from the 40s to people in their 70s. Because people bidding for the jobs has grown, along with people being denied positions, the number of complainers has grown, too. Unless the government declares it is done with the tradition of parachute appointments, it won’t get any public confidence in its resolve to reform public corporations.

I don’t doubt the Blue House is well aware of the public’s wishes and demands. It just cannot stop. The tradition has been handed down decade after decade, and it has done the trick. If the weather turns bad, the parachuting is put off until the storm quiets down. When people stop noticing, then the pilot sends the chutes on their way. We have seen it over and over again. The waiting line gets longer when openings are deferred. So the parachutes are dropped en masse at the end or beginning of the year when the media is busy covering other things. Or they’re done in the last gasp of a presidential term.

The ambush-like appointments were used during President Roh Moo-hyun’s term. The technique was polished and expanded by the succeeding government of President Lee. By the end of Lee’s term, 118 out of 250 auditors at 240 public companies won their jobs with the help of his administration. About 40 landed in jobs from parachutes distributed by the current government.

The replay of the situation inevitably leads to the justification that “not all parachutes are bad.” The deputy prime minister was not the first person to say that. Rhyu Si-min, a member of the ruling Uri Party in 2005, rebuffed criticism of the appointment of the deputy head of the Korea Consumer Agency, by asking “What’s so bad about politically motivated appointments?” President Roh and his party placed politicians from the president’s hometown in South Gyeongsang as heads of major public companies like the Korea Railroad Corporation and Korea Health Insurance Service to fill executive positions that had been dominated by people from South Jeolla, home of the previous president. Lee stuck to the same practice.

Connection-related appointments are deeply rooted in politics and just about all parts of Korean society. If the practice cannot be rooted out at once, we could take gradual steps. A different appointment system could be applied to 295 public companies. Some could be nominated, others could be recruited through public auditions or go through confirmation by the National Assembly. The president could restrict himself or herself to nominations of executive positions that absolutely require government intervention. These gradual steps may not work immediately, but at least the government should try.

The public will start to have faith in public sector reforms without controversies about appointments. Moreover, it would be much easier than fighting with the unions over restructuring debt.

JoongAng Ilbo, Feb. 20, Page 30

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

By Yi Jung-jae

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