[Editorial] New CEO appointments

President Park Geun-hye’s administration will reportedly begin to fill the vacant CEO posts of government-invested corporations this week. Among the corporations are Korea Hydro & Nuclear Power and the Korea Exchange.

The appointments are long overdue, given that some of the posts have remained unfilled for six months. Moreover, the CEOs of some other corporations, who have tendered letters of resignation, are waiting to be replaced. The administration says it has taken more time than expected to screen candidates.

What the administration needs to keep in mind when filling the vacancies is that the posts are not spoils to be divvied up among those who are given credit for helping to elect Park president. Regrettably, however, the ruling Saenuri Party is putting pressure on the administration to pick those it has recommended.

A case in point is a request made at a conference the ruling party held with the administration last Thursday. At the conference, a senior party official called on the senior presidential secretary in charge to favorably consider the candidates the party recommended.

The Park administration is well advised not to repeat the mistakes of its predecessor, which succumbed to the temptation to oust all CEOs from their posts simply because they had been appointed by the previous administration. The Lee Myung-bak administration did so at the risk of public censure, probably because not many vacancies were available for those demanding to be rewarded.

Another ill-conceived practice is for an administration to exercise influence in the selection of CEOs for companies in which the government does not have a single share. Among them are POSCO, a steelmaker privatized in 2000, and KT, a mobile carrier privatized in 2002. With none of the corporations under the control of any shareholder, the CEO posts invariably have been filled by those favored by incumbent administrations.

Recent rumors have it that the KT chairman, whose term in office expires in 2015, is under pressure from the presidential office to resign. Though both deny the allegation, the rumors are not dying down.

The POSCO chairman is also rumored to be on his way out. The rumor gained momentum when he was not included among the nation’s leading businessmen that were invited to attend a meeting with President Park last Wednesday.

The administration may attempt to justify its use of influence on the selection of a CEO for POSCO, reportedly claiming that it can exercise it through the National Pension Service, the largest shareholder of POSCO. But it should be reminded that the National Pension Service does not pick a CEO for Samsung Electronics, though it is its largest shareholder.

Any attempt to influence the selection of a CEO for KT or POSCO is beyond the purview of the administration.