April 27, 2024

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[THE INVESTOR] Dozens of South Korea’s state-run companies are in a leadership lull as the replacement of company heads who have reached the end of their terms has been delayed due to the impeachment of President Park Geun-hye.

According to the government’s data of state-owned firms disclosed on the website called Alio, the terms of 24 CEOs of state-run companies have ended, but their successors have not been decided yet.

Among such enterprises under the Ministry of Trade, Industry and Energy, the heads of KEPCO Engineering & Construction, Korea Plant Service & Engineering and Korea Trade Insurance Corp. finished their terms on Oct. 14, Nov. 8 and Dec. 11, respectively.

Among those under the Ministry of Science, ICT and Future Planning, the Korea Research Institute of Standards and Science, or KRISS, is looking for a new head as its president left in October. The abrupt departure came just four months after he took office in June due to some issues over his stake in a science-related venture firm.

In December, CEO terms at seven government-run firms, including Korea Racing Authority and Korea Express, expired but the selection of successors has been put on hold following the impeachment vote on Dec. 9.

In the normal running of the state, heads of state-run firms are recommended by the overseeing minister and named by the president.

About two months before a CEO ends their term, state-owned companies publicly announce that they are hiring a new head and pick three to five candidates. After the overseeing minister recommends one or two candidates to the president, the president then names the new company leader.

With President Park impeached on Dec. 9, it is still unclear whether acting President Hwang Kyo-ahn has the power to name any new CEOs.

In the financial sector, Industrial Bank of Korea CEO Kwon Seon-joo’s term is to expire on Dec. 27 but whether her post will be renewed or who will be her successor is unclear.

If Kwon’s successor is not decided after Dec. 27, Deputy CEO & Senior Executive Vice President Park Chun-hong will take over as acting CEO, an IBK spokesperson said. However, Park’s term is also set to expire on Jan. 20. If a CEO is not named until Jan. 20, there might be a complete power vacuum at IBK.

“We don’t expect such a (bad) situation to materialize. Just in case, we’re getting external legal advice to be able to enable the senior executive vice president to become CEO,” the spokesperson said.

By Kim Yoon-mi/The Korea Herald (yoonmi@heraldcorp.com)