Kwon’s second term at Posco is up in the air
Published: 07 Dec. 2016, 19:45
Posco CEO Kwon Oh-joon’s reappointment is expected to be determined at a board of directors meeting scheduled for Friday.
Kwon, who took office on March 14, 2014, is nearing the end of his three-year term. Under Posco’s corporate regulations, the CEO needs to notify the board of his will to stay on three months prior to a shareholders meeting in March.
According to steel industry sources, Kwon is likely to comment on his next moves during Friday’s regular board meeting at Posco Center in Samseong-dong, southern Seoul. If Kwon asks to serve a second term, the directors form a committee to decide.
If Kwon decides to leave, the board forms a succession council consisting of one internal director and three outside directors. The council picks one to four CEO candidates from within and outside the company and also proceeds with qualifications screenings and interviews.
There are currently six outside directors on Posco’s board, including Dongwon Industries CEO Lee Myung-woo, former LG CNS President Shin Jae-chul and President Kim Il-sup of the Seoul School of Integrated Sciences & Technologies.
The council must select one candidate by mid-February.
All former CEOs of Posco have served more than one term. If Kwon decides to step down, he will be be the company’s shortest-serving CEO.
For three years, Kwon has hinted he wants to stay in the job for another term. His accomplishments at the company include a restructuring from the beginning of his term to make the company a leaner organization and surpassing a trillion won ($860 million) quarterly profit for the first time in four years. Since he has pushed through roughly 100 restructuring ideas among an original target of 149, he claimed “serving another term is necessary to complete Posco’s restructuring.”
But Kwon’s reputation has been tainted after he and his wife were linked to the Choi Soon-sil scandal that is threatening the Park Geun-hye government’s existence.
The steelmaker donated 4.9 billion won to the controversial Mi-R and K-Sports Foundation controlled by Choi.
Kwon was also summoned by prosecutors on Nov.11 to be asked how Cha Eun-taek, a TV commercial director and confidant of Choi, managed to take over Posco’s former advertising affiliate Poreka. Kwon reportedly explained his position at a board meeting last month.
Another weak spot are allegations in political circles that a shadowy force helped him become CEO in the first place. While the government isn’t supposed to directly control Posco, management changes every time a new government takes office.
Former CEO Chung Jun-yang, who served during Lee Myung-bak administration, left after serving only 10 months after the Park administration took power.
BY JEON YOUNG-SUN [[email protected]]
Kwon, who took office on March 14, 2014, is nearing the end of his three-year term. Under Posco’s corporate regulations, the CEO needs to notify the board of his will to stay on three months prior to a shareholders meeting in March.
According to steel industry sources, Kwon is likely to comment on his next moves during Friday’s regular board meeting at Posco Center in Samseong-dong, southern Seoul. If Kwon asks to serve a second term, the directors form a committee to decide.
If Kwon decides to leave, the board forms a succession council consisting of one internal director and three outside directors. The council picks one to four CEO candidates from within and outside the company and also proceeds with qualifications screenings and interviews.
There are currently six outside directors on Posco’s board, including Dongwon Industries CEO Lee Myung-woo, former LG CNS President Shin Jae-chul and President Kim Il-sup of the Seoul School of Integrated Sciences & Technologies.
The council must select one candidate by mid-February.
All former CEOs of Posco have served more than one term. If Kwon decides to step down, he will be be the company’s shortest-serving CEO.
For three years, Kwon has hinted he wants to stay in the job for another term. His accomplishments at the company include a restructuring from the beginning of his term to make the company a leaner organization and surpassing a trillion won ($860 million) quarterly profit for the first time in four years. Since he has pushed through roughly 100 restructuring ideas among an original target of 149, he claimed “serving another term is necessary to complete Posco’s restructuring.”
But Kwon’s reputation has been tainted after he and his wife were linked to the Choi Soon-sil scandal that is threatening the Park Geun-hye government’s existence.
The steelmaker donated 4.9 billion won to the controversial Mi-R and K-Sports Foundation controlled by Choi.
Kwon was also summoned by prosecutors on Nov.11 to be asked how Cha Eun-taek, a TV commercial director and confidant of Choi, managed to take over Posco’s former advertising affiliate Poreka. Kwon reportedly explained his position at a board meeting last month.
Another weak spot are allegations in political circles that a shadowy force helped him become CEO in the first place. While the government isn’t supposed to directly control Posco, management changes every time a new government takes office.
Former CEO Chung Jun-yang, who served during Lee Myung-bak administration, left after serving only 10 months after the Park administration took power.
BY JEON YOUNG-SUN [[email protected]]
with the Korea JoongAng Daily
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