KT Board Relinquishes Control Over Personnel Decisions, Strengthening CEO Yoonyoung Park's Accountability Management

The KT board of directors has withdrawn a regulation that would have allowed it to intervene in personnel and organizational restructuring, just over six months after its introduction, thereby strengthening the management autonomy of CEO Yoonyoung Park. It is understood that the board restored the regulations to their original state after facing opposition from both the National Pension Service, a major shareholder, and internal stakeholders.

Yoonyoung Park, CEO of KT. Courtesy of KT

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On April 23, the KT board announced that it had amended some provisions of its board regulations to improve corporate governance. The main change involved adjusting the decision-making structure for personnel and organizational restructuring.

The board abolished the existing rule that required the CEO to obtain prior approval when appointing senior executives at the division head level or undertaking organizational restructuring. Organizational restructuring, which previously required advance reporting, has been adjusted to a simple reporting matter.

Last November, the board had granted itself the authority to review and approve the CEO's organizational restructuring and executive appointments in advance. This was justified as a measure to prevent parachute appointments and to protect shareholder interests in line with global standards. However, there was backlash both inside and outside the company, as the measure was seen as excessively infringing on management rights, beyond the role of the board as defined by commercial law.

The board is composed of eight outside directors and two inside directors, giving significant influence to the outside directors. Consequently, in January of this year, when the National Pension Service raised concerns that the board's new regulations conflicted with the articles of incorporation and could infringe on shareholder rights, the board decided to restore the previous rules. This move is interpreted as an effort to restore trust after the fairness and credibility of the board's decision-making process had been damaged.

The board has announced that it will focus on its fundamental role of management decision-making and oversight. As part of this, outside directors under suspicion of violating company regulations will be restricted from attending board and committee meetings and participating in deliberations until judicial outcomes are confirmed. The board also recommended that these directors refrain from exercising their voting rights. This move aims to address cases such as that of former outside director Cho Seung-a, who held concurrent positions as an outside director at Hyundai Steel, an affiliate of Hyundai Motor Group-KT's largest shareholder-and resigned belatedly despite being disqualified under commercial law, as well as outside director Lee Seunghoon, who has faced allegations of personnel-related lobbying.

Amid his commitment to strengthening responsible management, CEO Park is now expected to accelerate organizational reform for AI transformation (AX). From his official first day in office, Park pushed forward with personnel changes, restructuring the organization mainly with 'KT men' despite friction between the old and new guard. At the same time, he did not hesitate to bring in external talent to drive growth and innovation when necessary. The overhaul of KT is now in its final stages. Internal personnel and organizational restructuring have been completed, and only some affiliate CEO replacements remain, including at KT Skylife, which will hold an extraordinary shareholders' meeting on May 27.

Kim Yongheon, chairman of the KT board of directors, stated, "This resolution aims to increase the rationality and transparency of board operations and to clarify the roles of the CEO and the board. With the launch of a new CEO system, we will continue to improve our system to establish a governance structure that meets the expectations of shareholders and stakeholders."

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