[비즈한국] While the KT030200 Board of Directors attempted a shift in the status quo by introducing a reform plan, internal resistance is paradoxically intensifying. In particular, as the third labor union, the KT New Union, has submitted a petition to the Office of the President calling for an investigation, criticism regarding the board's management is mounting ahead of the regular general shareholders' meeting this coming March.
'Cold' Response to Reform Plan… Critics Call It a "Defense of Vested Interests"
On February 9, the KT Director Candidate Recommendation Committee (DCRC) held a board meeting and announced a shift in the method of selecting outside director candidates from the existing "concentrated" replacement model (replacing four at once) to a "distributed" replacement structure. Along with this, they decided to reappoint Yoon Jong-soo (current Chairman of the KT ESG Committee) and recommended Kim Young-han, a professor at Soongsil University, for the future technology sector, and Kwon Myung-sook, former CEO of Intel Korea, for the management sector as outside director candidates.
In the current composition of seven outside directors, An Young-kyun and Choi Yang-hee, whose terms are expiring, are set to step down. The outside director seat for the accounting field will be left vacant and filled at next year's regular shareholders' meeting.
The labor union's perspective is cold. The first labor union, the KT Labor Union, pointed out that measures such as the introduction of an evaluation system for outside directors are merely formalistic steps lacking concrete execution plans. There is particularly fierce backlash against the recommendation to reappoint Director Yoon. Last year, the National Pension Service (NPS) determined that the board's regulation, which required board approval when the CEO makes appointments to major positions and carries out organizational reshuffles, potentially violated the Commercial Code as it conflicted with the Articles of Incorporation. Director Yoon was one of the six who voted in favor of this. The third labor union, the New Union, also stated, "It is a deceptive act to re-nominate a person who, while claiming to be an ESG expert, stood by the chaotic operation of the board.”
The Pitfall of 'Distributed Replacement': Concerns of Transformation into a Means to Defend Vested Interests
The issue at hand is the effectiveness of the 'self-reform.' The board plans to move away from the simultaneous replacement of four existing outside directors and distribute their terms. While this is aimed at achieving management stability, critics point out that it functions similarly to a "staggered board system," potentially acting as a toxic provision that makes it difficult to replace a majority of directors at once. In this scenario, there are concerns that it could act as a mechanism to block human-resource reforms by shareholders in a company with dispersed ownership, like KT, which has no controlling shareholder.
In particular, since this structure was introduced just as the NPS changed its purpose of stock ownership to 'general investment' and signaled active exercise of shareholder rights, some interpret it as a move to defend vested interests rather than genuine reform.
The controversy over the qualifications of former outside director Cho Seung-ah is also seen as having damaged the board's moral standing. The New Union claims that although former Director Cho was ineligible under the Commercial Code due to holding a concurrent position as an outside director for a Hyundai Motor Group affiliate (a controlling shareholder), the board turned a blind eye to it and tried to cover it up through a 'retroactive resignation' filing. The investigation petition submitted by the New Union to the Office of the President also includes allegations of management interference by unqualified directors.
Han Young-do, Chairman of the K-Business Research Forum (former professor at Sangmyung University), emphasized, "It is far from responsible management to nominate a person responsible for past chaotic operations for reappointment while emphasizing only structural stability. If the board truly wants to normalize governance, it must first establish an objective external evaluation system that shareholders and members can accept, along with a principle of strictly excluding unqualified personnel.”
He also pointed out the incompleteness of the board composition due to the absence of accounting experts. Chairman Han explained, "For listed corporations with total assets of 2 trillion won or more, the installation and composition of an audit committee are not choices but legal obligations mandated by the Commercial Code. It is problematic to leave the accounting field, which requires the most professional oversight, vacant.”
As the conflict between the board and the union runs in parallel lines, the management vacuum on the ground is deepening. Two months after the start of the new year, organizational reshuffling and appointments for major positions have not taken place. The KT Labor Union is strongly demanding the introduction of institutional mechanisms, such as clarifying the point at which authority is granted when the CEO is replaced, to minimize management gaps.
The New Union is intensifying its offensive. In the petition submitted to the Office of the President on the 22nd, the New Union requested a swift investigation, alleging "illegal management interference by unqualified directors" and "suspected destruction of minutes and ballots" during the next CEO selection process. The union plans to stage protests to block the shareholders' meeting if the appointment of unqualified directors is pushed through.
Regarding concerns that the board's regulations on personnel appointments for major positions might conflict with the Articles of Incorporation, the KT Board stated that it would resolve the misunderstanding by promoting revisions to the regulations and Articles through consultations with the National Pension Service. Additionally, they plan to commission a third-party independent organization to conduct a fair and objective investigation into recommendations regarding the selection of outside director candidates. Whether the board's reform plan is accepted at the upcoming regular general shareholders' meeting in March and how the National Pension Service casts its vote are expected to be the biggest variables in the normalization of KT's governance structure.