(EDITORIAL from the Korea Times on Jan. 16)

Steel Maker in Crucible: Time to Stop Meddling in Private Firms' Management

POSCO Chairman Lee Ku-taek expressed his intention to step down Thursday, saying
a new leader was needed to tide over the current ``crisis.''
To be sure, Lee meant the ongoing global recession and sagging demand for steel
products by ``crisis.'' But most POSCO employees would presume there is another
crisis ??? political pressure to replace the CEO of the nation's largest
steelmaker.
Actually, all five predecessors of 63-year-old Lee had to leave their posts
before the expiry of their tenure along with changes in political power, so much
so that some POSCO people say, not entirely jokingly, that their company had
better change its CEO's terms to those of presidents. ``Ours is a 'privatized
public corporation,''' they said.
POSCO was completely privatized in 1998 and foreign investors, including Bank of
New York Mellon and Warren Buffett, now hold combined equity stakes of 43
percent, compared with the Korean government's 4.3 percent held through the
National Pension Fund. Both Cheong Wa Dae and the Ministry of Knowledge Economy
are of course categorically denying their involvement in the personnel management
of the world's fourth-largest steelmaker.
If managers tell by their records, however, Lee's six years at POSCO's top post
should go on in the company's history as the period of one of its most
spectacular growth in both financial and technological terms, as seen by his
election as also the chairman of the International Iron and Steel Institute
(IISI) in 2007.
Little wonder foreign fund managers are inquiring about the reasons behind what
they see as the incomprehensible resignation of the POSCO chief and expressing
unease with the ``political risks'' in investing into one of Korea's best
blue-chip companies, which Buffett recently dubbed as a ``hidden pearl.''
The government should not shrug it all off as a 40 year-old practice, as the
company has already been privatized for a decade. Particularly regrettable is
that all this is happening under an administration led by a business-friendly,
market-worshipping President who has stressed the need for improving the nation's
corporate governance to advanced countries' levels.
Unconfirmed reports say CEO Lee's resignation has something to do with his
financial support for the overseas training program of a progressive civic group
that later took part in candlelit vigils. If true, it is another narrow-minded
political vendetta, raising questions over whether the government is really going
all out to unify the right and left for the single purpose of riding out the
economic crisis. POSCO for its part needs some self-reflection, too, on whether
it has done something that could encourage governmental meddling while enjoying
its status as the nation's sole steel maker with blast furnaces.
Somehow, Lee's successor will have to shoulder the extra burden of setting up a
new tradition that can keep the company from outside influence in addition to
such industrial tasks as overcoming the sales slump and completing its overseas
projects in India and Vietnam.
The bottom lines in the years ahead will depend on who succeeds the incumbent
CEO, but the outlook is unclear if certain rumors are any indication. Among the
candidates on the lips of industry analysts are the former and present finance
ministers, including SaKong Il and Kang Man-soo.
It's time for the government to affirm POSCO's ``managerial independence,'' not
just for the sake of the steelmaker but for the national economy.
(END)