KT nominates outside directors in bid to push CEO search

KT office building in Jongno District, central Seoul [YONHAP]

A KT internal committee recommended seven outside board directors, with the telecommunications operator taking the initial steps to fill its largely vacant board seats and appoint a new CEO.

They will be appointed if shareholders approve the committee's decision at an extraordinary meeting on June 30.

The seven nominees are: Kwak Woo-young, former head of the Vehicle IT Development Center at Hyundai Motor Group; Kim Seong-cheol, professor at Korea University's School of Media and Communication; Ahn Yeong-kyun, a director of the International Federation of Accountants (IFAC); Yoon Jong-soo, former vice environment minister; Lee Seung-hoon, head of global business at Korea Corporate Governance Improvement; Cho Seung-ah, professor at Seoul National University's Graduate School of Business Administration and Choi Yang-hee, president of Hallym University.

Kwak, Lee and Cho were recommended by shareholders holding sizable KT stakes. In order to recommend outside directors, shareholders must hold a more-than 0.5 percent stake in KT for over six months.

The candidates will join the board with the sole outside director Kim Yong-hun, a former Secretary General at the Constitutional Court of Korea.

The appointment of new outside directors means that the term for outgoing board members — Kang Chung-gu, Pyo Hyun-myung and Yeo Eun-jung — automatically ends under the Commercial Act that stipulates a listed corporation must have at least three board members.

The KT committee also proposed a set of revisions to the process of appointing a new CEO.

The existing committee tasked with nominating a CEO will shift to a standing committee to ensure the transparency and fairness of the CEO evaluation process. The latter's members will made up of solely outside directors.

KT will abolish the practice of prioritizing the screening process of its existing CEO to make sure each candidate is given equal treatment.

“Knowledge and experience in the ICT field,” which was a previous qualification requirement, has now been deleted.

“Because the company is made up of more than just the ICT division, we thought it would be better to expand the criteria to industry expertise rather than to limit it to one category,” KT explained in a statement.

Qualifications for inside directors were expanded to include management and business expertise, and they must also hold a title equivalent to vice president or higher within the organziation.

Additionally, the requirement for shareholder approval for CEO candidates have been raised from 50 to 60 percent of outstanding voting rights.

Moreover, to boost the influence of outside directors within the board, the number of internal directors will be reduced from three to two.

“We will appoint new outside directors and complete the revision of CEO qualifications in the first round of extraordinary general meeting on June 30 and the committee of new outside directors will quickly push ahead with appointing a new CEO,” KT said.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]