KICAC Urges to Improve the Personnel Process in State-Owned Enterprises

The Korea Independent Commission Against Corruption (KICAC) urged fairness and transparency in appointing executives like heads of state-owned enterprises (SOE) on March 13.

Heads of SOEs are currently appointed by the process of recommendation of a chairman nomination committee, nomination by ministers in charge, and appointment by the president.

The KICAC pointed out, “The chairman nomination committee is made up of non-standing executives selected from the committee on SOE management, centering on government ministries and private members that the board of executives selects. Non-standing executives account for a majority of the committee members,” adding, “That leads to the possibility that government ministries have an influence on the process of recommending candidates for chairman, which causes controversies over fairness. ”

The committee on SOE management is made up of six government officials including the ministry of Planning and Budget, the vice minister of Finance and Economy and four vice ministers of ministries in charge, and five private experts that the president invited. Non-standing executives who were selected among members have a strong influence in nominating executives of SOEs.

Inspectors, the “Number Twos” among SOEs, are appointed through the process of voting by the committee on SOE management, nomination of the minister of Planning and Budget, and appointment by the president. However, the KICAC pointed out that the process lacked a way to handle solicitation of applications and approvals of candidates’ integrity.

It is the first time ever that a government organization has publicly pointed out the personnel policy of SOEs.

The KICAC proposed to increase the number of private members of the committee on SOE management to six, the same number as government officials, and form the chairman nomination committee only with experts from the private sector who are selected by the committee on SOE management and the board of executives, respectively.

In addition, the KICAC also argued for the introduction of solicitation of applications in nominating inspectors for SOEs, and consultations with it to confirm the integrity of candidates.

It also maintained that the government should come up with measures that prevent retired government ministry officials from working with a government agency that is closely associated with his or her former work for a year after retirement.

Yong-Gwan Jung yongari@donga.com