KT Confirms 5 Experts for Governance Reform TF Including Joo Hyung-hwan and Sunwoo Seokho

5 Final Candidates Confirmed Out of 9
"Selected Based on Comprehensive Consideration of Expertise"
Key Issue: How to Change the Board Composition Plan

KT, which has fallen into a management vacuum, has finalized five experts to participate in the 'New Governance Establishment TF.' This TF will promote improvements across the entire governance structure, including the procedures for appointing the CEO and outside directors, as well as the role of the board of directors. There is particular interest in how the composition of the board, which becomes controversial during regime changes, will be altered.

Composed of Five Current and Former Ministers and Professors

KT announced on the 17th that from the 5th to the 12th, it conducted a governance expert recommendation process targeting major domestic and international shareholders holding more than 1% of shares, receiving a total of nine candidates recommended by seven shareholders, and finalized five of them.

The KT board reviewed the shareholder-recommended candidates from the perspectives of expertise in governance and diversity of the TF composition, and explained that external members were selected comprehensively considering social prestige, understanding of the board’s role, and expertise in ESG management.

The list of external TF members includes Kim Jun-ki, a professor at Seoul National University Graduate School of Public Administration and current president of the Korean Public Enterprise Society; Sunwoo Seok-ho, professor emeritus at Hongik University and former chairman of the KB Financial Group board; and Cho Myung-hyun, a professor in the Department of Business Administration at Korea University and former president of the Korea Corporate Governance Service. Also included are Joo Hyung-hwan, former Minister of Trade, Industry and Energy and outside director at Hyundai Mipo Dockyard and Hotel Shilla, and Alicia Ogawa, an assistant professor at Columbia University School of International and Public Affairs and a full member of the European Corporate Governance Institute (ECGI).

The TF will begin by selecting an external professional institution to support the derivation of governance improvement plans, and will subsequently review and prepare improvement measures regarding the procedures for appointing outside directors and the CEO, as well as the establishment of the board’s role.

The KT board stated, “We expect that a governance plan trusted externally will be prepared, centered on external experts with governance expertise and social prestige. Under the advanced governance system prepared by the TF, we will complete the appointment of new outside directors and support the new board composed of these outside directors to promptly finalize the CEO appointment, thereby laying the foundation for sustainable growth.”

The Core is ‘Outside Directors’

KT did not disclose which major shareholders recommended which individuals, but the industry believes it is highly likely that the TF was composed mainly of candidates recommended by the largest shareholders such as the National Pension Service, Hyundai Motor Group, and Shinhan Bank, as well as the second and third largest shareholders.

Therefore, many analyses suggest that the direction of governance improvement by the TF will align with the government’s intentions. The National Pension Service has represented the government and ruling party’s stance regarding KT’s board and governance, and Hyundai Motor and Shinhan Bank also have the National Pension Service as a major shareholder.

The core of this governance restructuring is the outside directors. The government and ruling party have expressed distrust toward the KT outside directors appointed during the Moon Jae-in administration and have raised their voices for board restructuring.

In fact, among the recently resigned outside directors Kim Dae-yu and Yoo Hee-yeol, as well as Lee Kang-cheol, who served as the Blue House Senior Secretary for Civil Society during the Roh Moo-hyun administration, there were many individuals with old (former) ruling party tendencies within the board under CEO Koo Hyun-mo’s leadership. These individuals reportedly held key committees within the board, such as the ‘CEO Candidate Screening Committee’ and the ‘Outside Director Candidate Recommendation Committee,’ thereby controlling personnel authority.

The TF’s greatest task is expected to be deriving a board composition plan that can end the recurring conflicts over outside directors that arise with every regime change.

This content was produced with the assistance of AI translation services.