By Nam Hyun-woo
Selecting a new chief executive is the most crucial thing a board does. Choose the "right one" and everything else will become easier. Choose the wrong one, however, and it could be a catastrophe.
The question then becomes: What criteria predict the success of a candidate for this high-profile role? The answer depends on the company's situation. For a company like POSCO, the CEO should lead change. Leading significant change is a difficult challenge and requires a seasoned leader with a new perspective on the company.
But the CEO-search process at POSCO is raising concerns about transparency in its move to avoid any political interference, as the selection process is being made with a high level of secrecy.
POSCO said Wednesday its "CEO Succession Council" has narrowed the number of candidates for the top position to 11. The council is POSCO's CEO-search committee.
Initially, the committee was to shortlist five candidates out of 10 they were considering; but added six more outside candidate recommended by a recruitment agency just a day before it met. The committee said "the pool of candidates outside of POSCO was not rich enough."
"The committee requested more than 30 shareholder companies to recommend candidates for the position, but only one had a recommendation," a POSCO official said. "The committee recognized the pool was too shallow and asked scouting firms to recommend more candidates."
After the move, some candidates were said to have raised allegations that "there might be a candidate who received favors from Cheong Wa Dae or other ranking government officials."
The current Chairman and CEO Kwon Oh-joon offered to resign in April this year. This was considered controversial with some observers saying he was being pressured to step down due to his tenure during the previous Park Geun-hye administration. All of his predecessors faced the same fate every time new a administration was elected.
POSCO flatly denied such allegations, but critics say the presidential office is seemingly giving more credit to its own choices or preferred candidates for the POSCO chairmanship this time.
Too much influence
Late last month, the minor opposition Bareunmirae Party claimed a number of former POSCO chairmen met at a hotel in Incheon and were "requested" to support a certain candidate who was picked by presidential chief of staff for policy Chang Ha-sung.
Cheong Wa Dae and POSCO refuted the claim and threatened legal action against the party. The claim put former POSCO President Kim Jun-sik as one of the top hopefuls among others.
Kim graduated from Seoul National University, but went to the same elementary and middle school as Chang. He previously served as head of POSCO's Gwangyang steelworks, but as he is not now working at POSCO, some observers say he could be the one outside candidate included later.
Former SK Innovation Vice Chairman Koo Ja-young is also another candidate who has suddenly emerged. Koo, who is reported to be an American citizen, was an ExxonMobil official. POSCO founder Park Tae-joon himself recruited Koo who spent five years with the company. POSCO has said its candidates list included a foreigner.
Along with those outside candidates, the names of POSCO President and Chief Operating Officer Oh In-hwan, leading the company's Steel Segment 1; POSCO President Chang In-hwa, leading Steel Segment 2; and POSCO Energy President Park Ki-hong are still on the lips of watchers.
POSCO is not disclosing the shortlisted candidates.
When it was appointing Kwon as chairman four years ago, it revealed the names of five candidates and the reasons why it picked them, but it is not so forthcoming this time around.
Criticism is also on the timing of adding outside candidates that POSCO deliberately selected Tuesday because the country's media would be busy covering the United States-North Korea summit and the local elections and National Assembly by-elections taking place Wednesday.
"The company will not discuss matters related to the CEO Succession Committee," a POSCO official said. "The committee is selecting CEO candidates through a fair and transparent processes."
The committee is comprised of POSCO Board Chairman Kim Joo-hyun, former Korea Employers Federation Chairman Bahk Byong-won, Dongwon Industries CEO Lee Myoung-woo, former SK Group Vice Chairman Kim Shin-bae and Sungkyunkwan University professor Chung Moon-ki.
The company said the council will narrow the number of candidates to five in the next meeting and interview them after that. However, it did not provide details on when the meeting will take place. Reportedly, the company plans to have a final candidate within this month.