Half of State-Owned Enterprise CEOs Are 'Yoon Administration Appointees'... Controversy Over Holdover Appointments

[Financial News] One year and four months after the Lee Jae-myung administration took office, it has emerged that one in two heads of major state-owned enterprises was still appointed by the previous administration. Many of them have terms guaranteed through next year or later, prompting concerns that controversy over so-called “holdover appointments”—which recurs whenever power changes hands—could flare up again. Calls are growing for institutional reforms to align the terms of office for the government and public-institution heads.
On the 14th, an analysis by Ahn Do-geol, a Democratic Party of Korea lawmaker on the National Assembly’s Finance and Economy Planning Committee, of executives at public institutions subject to deliberation and resolution by the Public Institution Management Committee found that, as of the 13th, people appointed by the previous administration held 13 of the 27 state-owned enterprise chief positions (48.1%). Of those 13, the terms of 9 (69.2%) were found not to expire until 2027 or later.
Under the current Act on the Management of Public Institutions, the terms of public-institution heads are three years, while those of directors and auditors are two years. Because their terms are guaranteed independently of the president’s term, heads appointed by a previous administration can remain in office for a considerable time even after a change of government.
A considerable number of public-institution executive positions had also gone without successor appointments despite the terms having expired. Of the positions surveyed, the terms had expired for 44 (14.6%), of which 8 were vacant. The incumbents in the remaining 36 positions continued to perform their duties after their terms ended. Current law allows incumbents to continue serving until successors are appointed.
However, an expired term does not necessarily mean that an appointment has been delayed or neglected. The lawmaker’s office found on further review that successor selection procedures, including open recruitment, were already underway for 37 of the 44 positions with expired terms (84.1%). It found that consultations were being held with labor unions and other internal stakeholders for five of the worker-director positions among them.
Selection procedures had yet to begin for seven positions. Four of these were positions related to KEPCO KPS, where legal disputes over the appointment of its president and court decisions were found to be hampering the selection process. The institutions concerned said they would promptly proceed with relevant procedures, including open recruitment, for the remaining three positions.
Although successor selection is underway for many positions whose terms have expired, observers say the structural problem of misaligned terms for the government and public-institution heads remains. In particular, heads appointed by the previous administration can remain in office for a long time after a new government takes office, potentially reigniting conflicts over appointment authority whenever power changes hands.
A bill to amend the Act on the Management of Public Institutions is pending in the National Assembly. It would make the terms of public-institution heads expire when the president’s term ends. However, there are also concerns that aligning the heads’ terms with the government’s could weaken the institutions’ management independence and personnel stability, so the issue is expected to require discussion during the legislative process.
Ahn said, “Procedures such as open recruitment are underway at most institutions whose heads’ terms have expired, but some appointments appear to be facing significant difficulties because of holdover appointments by the previous administration and legal disputes.” He added, “For a fundamental solution, the National Assembly needs to step up revisions to relevant laws, including aligning the terms of the government and public-institution heads.”

[email protected] Kim Gyeong-min Reporter