POSCO’s new chairman election mired in rumors of government interference

The election of the next chairperson to lead POSCO, South Korea’s steelmaker and fifth-largest conglomerate with assets worth $102 billion (132 trillion won), is becoming increasingly turbulent as rumors about President Yoon Suk-Yeol’s administration interfering with the company’s management reshuffle recently spread online.

Presidential chief of staff Kim Dae-ki requested a police investigation into the person responsible for spreading such rumors, according to the police on Dec. 25. Rumors that Kim is trying to promote a close friend as POSCO chairman have circulated rapidly in political circles. The police launched an investigation after receiving the complaint on Christmas Eve.

Presidential chief of staff Kim Dae-ki / Yonhap News

Speculation that potential chairman candidates have ties to current and former administrations, or former government ministers is further fueling the rumor mill. The messages carrying these rumors, which are circulated online, mention the real names of people and their alleged motivations.

While POSCO’s chairman elections have often been laden with controversy since the company’s privatization in 2000, this level of contention is unprecedented, according to industry insiders. POSCO has not appointed an outsider as chairman since its establishment, except for former Chairman Kim Man-je, who was nominated as POSCO chairman during the Kim Young-sam administration in 1994. He served as finance minister and deputy prime minister before taking on the role of POSCO chairman.

However, some politicians have advocated for nominating an outsider, given the current challenges in the steelmaking industry. “The role of the next POSCO chairman is more important than ever as the global steel industry faces various challenges such as decarbonization, oversupply, and the US-China conflict,” said an industry insider.

Incumbent Chairman Choi Jeong-woo has also emerged as a potential candidate, making him the first POSCO chairman to apply for a third term since 2000.

The CEO Nomination Committee of POSCO plans to compile an initial “long list” of candidates, including internal candidates, suggestions from headhunters, and recommendations from major shareholders by mid-January next year. The Committee aims to narrow this list down to a “shortlist” of five candidates by the end of January, followed by a selection of two or three finalists in February. The final choice will be made by the board of directors and shareholders in March next year.