Employee Reps Get Executive Decision

Starting April 2007, 94 public agencies, such as the Korea Land Corporation and Korea Railroad, will set aside seats for employee representatives in their executive nomination committees. The role of this committee is to recommend candidates to executive positions such as president, director, and inspector in the firms.

To remove corruption or favor during the appointment process, the government made it compulsory to secure seats within the public agency steering committees for figures in labor circles. The steering committees examine the qualification of candidates selected through the executive nomination committee.

Yesterday, the Ministry of Planning and Budget announced that after the Act on Operation of Public Agencies recently passed in the National Assembly, it plans to enact an enforcement ordinance, the framework of this act, to be implemented next April.

The number of public agencies that are subject to this law is 94, including Korea Railroad, Korea Land Corporation, Korea Tourism Organization, KOTRA, Korea Credit Guarantee Fund, Korea Export Insurance Corporation, Korea National Park, Korea Deposit Insurance Corporation, Korea Racing Association, Government Employee Pension Corporation and others.

The ministry decided to include “people who can represent the voice of employees” in the executive nomination committee. Since this act states that employees and executives of the public agencies are prohibited to be members of the committee, external figures that are selected by employees will exert voting powers in the committee. The executive nomination committee is a body that plays a critical role in nominating executives and recommends several candidates of presidents, permanent directors, and a majority of non-permanent directors.

The public agency steering committee that examines the candidates is a combination of steering committee of government-financed agencies and steering committee of government affiliated organizations. This committee consists of less than 20 members, including the minister of planning and budget (as chairperson), the vice minister of Finance and Economy (as vice chairperson), and experts from the private sphere.

According to the original proposal, the government qualified people with abundant relevant knowledge and experience to be a member of the committee. However, during the National Assembly’s deliberations, the qualifications changed. The act states, “People who are recommended by the Ministry of Planning and Budget and have neutral perspective and experience in the legal or economic community, academia, press, labor circle, and others are eligible for committee member posts.”

As a result, people in the labor circle will be able to exert influence in appointing executives of public agencies.

smhong@donga.com sublime@donga.com