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Impersonal reasons

Replacing the heads of financial institutions in the private sector can’t be condoned.
Nov 10,2017
Kim In-ho, outgoing chairman of the Korea International Trade Association (KITA), has written letters of resignation three times during more than 30 years in public service. He has always hated citing ambiguous “personal reasons” as the cause of his resigning. He believes there must be a clear reason for leaving a public office.

He stuck to that belief. He offered his first resignation as the director-general for economic planning at the ministry of economic planning (now the Ministry of Strategy and Finance) in 1990 after he was promoted to an assistant ministerial post. Such a resignation was a normal procedure. But he spelled out why he was stepping down. “Because of a government appointment,” he wrote.

When he resigned as vice minister for the Ministry of Environment under President Roh Tae-woo after a new president took office, he wrote that he was offering to leave “for smooth appointments of the new government.” When he quit as senior presidential secretary for the economy in 1997, he said he was resigning because he failed to fulfill his job of assisting the president.

That’s not all. Kim believes that the man in charge also should make it clear why subordinates must leave their jobs. “The reason for dismissal also must be clear, whether it be because of changes in policy, a poor performance, or for appeasement of public complaints,” he said.

Otherwise, transparency in public office cannot be upheld, he said. When he offered to resign from KITA even before his term ended, he also clearly stated that he was doing so “because of the government’s intent.” Others told him not be so blunt. But he did not bend his lifetime belief to please the government.

Kim is a rarity among outgoing chiefs of public organizations and financial institutions. The so-called purging of bigwigs in the public sector appointed by a former president has become a chronic ritual after a new president is elected and an administration is formed.

When asked why he was offering to step down in August with over two years left in his tenure, Korea Exchange CEO Jeong Chan-woo shrugged, “You all know the reason. But I won’t comment.” Lee Dong-geol, CEO of the state-run Korea Development Bank, quietly stepped down in September. Nobody asked why or had to. The same pattern was repeated in the past government and the governments before.

Replacing the heads of state organizations like KDB and Korea Exchange is understandable. But the same custom must not be forced onto financial institutions in the private sector. Earlier this month, Woori Bank CEO Lee Kwang-gu offered to resign citing responsibility for allegations of job favoritism in the bank’s hiring.

He showed no sign of early retirement in last month’s parliamentary auditing. At the time, he said he would do his utmost to get to the bottom of the allegations. But he retreated as soon as the prosecution embarked on an investigation.

Prosecutors this year raided five private financial companies — BNK Bank in March, DGB Financial Group in September, NH Financial Group in October, and KB Kookmin Bank earlier this month. Mobilizing law enforcement authorities to tame institutions ahead of revolving-door job placements was also customary.

The government justifies its actions as a part of a crackdown on so-called “past ills.” Whatever the reasons, there must be stricter guidelines in the government’s meddling in CEO appointments. Posco chairman and CEO Kwon Oh-joon and KT Corp. CEO Hwang Chang-gyu were granted term extensions by their boards earlier this year. They have more than two years left in their second terms.

Both have been credited with sharply improving the top and bottom lines of their companies. If they are pushed out of office before their terms end, the government’s trend of replacing CEOs as part of its campaign to root out past ills will be questioned. Kwon confessed he was advised to step down by a government office.

The two corporations were privatized long ago. Yet governments have continued to act as if they owned them. They used the executive positions in the companies as rewards for their campaign contributors and loyalists. Former president Park Geun-hye came under fire for trying to push out former KT chairman Lee Suk-chae. We all would know the real reason if the chiefs of the steelmaker and telecommunications giant step down — even if they cite “personal reasons.”

JoongAng Ilbo, Nov. 9, Page 30

*The author is a columnist of the JoongAng Ilbo.

Yi Jung-jae