Report Says Less Than 5% of Public Enterprise CEOs Promoted from Within

Statistics show that less than 5% of former public enterprise CEOs come from their mother organizations. Also, it was shown that during the military ruling period, CEOs were mostly from the military, whereas since President Kim Young Sam was inaugurated in 1993, government officials and politicians have been named CEOs in greater numbers.

As of October 15, there have been 301 CEOs of the 24 major public enterprises, including the Korea Electric Power Corporation, Korea Land Corporation, Korea National Oil Corporation, Korea Development Bank, and Industrial Bank of Korea.

Among these 301, government officials who have built their careers in government bodies such as the Ministry of Finance and Economy or the Ministry of Government Administration and Home Affairs constituted 45.2% or 136 of them.

69 CEOs had military backgrounds (22.9%), while only 14 CEOs (4.7%) reached the top from their own corporations.

Meanwhile, only 14 CEOs (4.7%) came from the political arena; but if political background was linked with government and military background, the number jumps to 66 (21.9%).

Members of this cadre began their careers in the government or the military, transited to the National Assembly or the ruling party, and ended up as public corporation CEOs.

16 out of the 24 (67%) public corporations surveyed have never selected an internal candidate CEO. These corporations are the Korea Gas Corporation (8 CEOs), Korea Tourism Organization (20 CEOs), the Export-Import Bank of Korea (14 CEOs), and Korea Credit Guarantee Fund (16 CEOs).

Public corporations with internally chosen CEOs are the Korea Development Bank, Korea Electric Power Corporation, KOTRA, and Industrial Bank of Korea.

Also, prior to 1992 (according to the appointed date), military personnel constituted 33.9% of the CEOs, while the number declined to 9.6% after 1993, when military control ended with the Kim Young-sam administration.

Nevertheless, the government official background CEO percentage rose from 35.2% to 57.4%, and those CEOs with political backgrounds increased from 12.1% to 33.8%.

The Ministry of Finance and Economy, the Ministry of Government Administration and Home Affairs, the Ministry of Commerce, Industry and Energy, and the Ministry of Construction and Transportation showed the highest propensity to yield public corporation CEOs.

jarrett@donga.com