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How LG Group Chairman Ku Bon-mu Selects CEOs

Posted October. 11, 2005 03:02,   


Not everyone who makes it onto the candidate list becomes a CEO.

The last gateway to becoming a CEO is a corporate personnel recommendation committee. However, it is not enough. CEO candidates also have to pass the tests of Chairman Ku Bon-mu. He tests them with unexpected golf games or overseas business travel.

CEO Candidates Are Chosen from Assistant Managers or Managers-

At LG, the “CEO Pool” begins to be applied to staff as early as when they are in their early 30s.

Each affiliate company has a “Young HPI” (High Potential Individual) program. Companies assist them since they are lower-level managers such as assistant managers or managers, so that they can acquire qualities as a leader. There is a similar program for deputy general managers and general managers who are mostly in their late 30s and early 40s.

Called Leaders HPI, they are given the opportunity to show their potential as a manager. They are exposed to crises and trials. In this way, they can experience work at various departments and get intense training. Sometimes, they lead new or deficit-running businesses. Sometimes, they assume the role as a leader of a project for developing new products. They may also head overseas operations or subsidiaries.

Executives are selected from those on the list. And another list, the candidate list for president, is made up of executives in their late 40s.

Staffs on the CEO candidate list have more training opportunities than other staff. Companies arrange for them to acquire certificates in accounting. Not only that, they are sent to world-class companies or overseas research institutes so that they can hone their abilities to solve problems related to a specific challenge. It goes without saying that they get on the job training from their seniors.

An executive at LG said, “Leaders HPI have the opportunity to present business plans with CEOs of affiliate companies and leaders of business departments attending. Occasionally, some Leaders HPI have been written off after they botched a presentation or appeared too nervous while giving a presentation.”

CEO Candidates Are Tested While Playing Golf or on Overseas Business Travel-

The board of directors assigns presidents of the LG Group’s affiliate companies after the personnel recommendation committee screens them. This trend has been increasingly conspicuous since it changed to a holding company system.

However, Chairman Ku himself tests executives who are promising candidates for a CEO post “without their knowledge.”

Chairman Ku plays golf every weekend at the Gonjiam Country Club in Gwangju, Gyeonggi Province. Chairman Ku usually plays golf with CEOs of affiliate companies and presidents of domestic and foreign companies that are in partnership with LG. And Chairman Ku slips CEO candidates into these golf outings.

Chairman Ku, who shoots in the low 80s with a handicap of 9, do not give consideration to how well his golf buddies play golf. What are more important to him are golf manners. In particular, he is said to observe closely how the candidates overcome difficulties once they get into trouble. He especially takes a close look to see whether the candidates are playing golf with sincerity or not.

For example, he looks closely at candidates’ facial expressions or responses after candidates tee off out of bounds as well as how they finish after their ball goes into a bunker. He also checks candidates’ responses when they three-putt on a green, thus increasing their total shots.

Overseas business travels are also used as a litmus test. An official at LG said, “Chairman Ku holds the view that while on business travel, CEO candidates’ characteristics and qualities can be observed more naturally.”

Young-Hae Choi yhchoi65@donga.com