Korean conglomerates turn more eager in recruiting outside CEOs

2020.02.12 14:55:06

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As Korean corporations turn more multinational, big companies that mostly kept leadership in the family have become more open to outsiders.

As of February, 466 out of the 580 CEOs studied were recruited outside the owner family, according to a local business tracking site CEO Score on Wednesday.

When compared with 2015 – the average CEO tenure is 4.5 years – the percentage of professional CEOs rose 4.3 percentage points to 80.3 percent.

Externally appointed CEOs came out particularly strong, with their percentage rising to 27.6 percent from 22.9 percent over the five-year period.

Meanwhile owner family CEOs saw their share slide to 19.6 percent from 24.0 percent. CEOs that rose through the company ranks were still predominant, with their percentage held steady at 52.8 percent compared with 53.1 in 2015.

CEO Score said demand for outside experts appears to have surged as companies face greater challenges amid the low-growth environment and global economic uncertainties.

Former Samsung executives remained the most sought-after, with their percentage largely unchanged from 15.0 percent to 14.4 percent.

Other notable outside hires were financial firm executives at 13.1 percent, and government officials at 12.5 percent.

The biggest leap came from foreign company executives, whose share jumped from 5.8 percent to 13.8 percent.

Last year, LG Chem appointed Shin Hak-cheol, senior vice president of 3M, as its new chief, the first outside head in the company’s 71-year history. Shin was the first Korean to manage 3M’s overseas operations as executive vice president. He joined the company’s Korean unit in 1984 and went on to become the head of the Philippines unit and executive vice president of the industrial business group at its U.S. headquarters.

Daelim Industrial CEO Kim Sang-woo previously worked for BNP Paribas and SoftBank Korea. SK Gas CEO Yoon Byung-suk was formerly vice president of Boston Consulting Group.

The number of female CEOs inched up from six to nine. The average CEO age was 59.5, up 0.9 years from five years ago. Those from Seoul and the southeastern province of Gyeongsang accounted for 61 percent of the total.

By Pulse

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