Chang Ha-sung, an outspoken critic of South Korean chaebols chosen as President Moon Jae-in’s chief of staff for policy to spearhead various structural reforms, is credited to have transformed the country’s top steelmaker Posco with rigid top-down legacy from its birth by a military general under the Park Chung Hee regime into one of the most open and forward-looking big companies in Korea.

Chang, while heading a center within Korea University devoted to improve corporate governance structure, was approached by then Poscoal chairman Lee Ku-taek. Some of his recommendations were approved by shareholders in 2004.

One of them was the introduction of cumulative voting system, which is included in the revised Commerce Law to enhance minority shareholders’ rights stalled in the National Assembly due to concerns about abuses by predatory forces. Also known as proportional voting, the system entitles shareholders to vote proportionately to the number of shares they hold. Among the 165 listed companies affiliated to 26 conglomerates with asset exceeding 10 trillion won ($8.92 billion), only eight allow such right, according to the Fair Trade Commission.

Another hallmark in Chang’s proposal to improve governance structure was the separation of chairmanship from leadership in the board of directors. The rather radical idea was first internally challenged and was approved in 2006. Since then Posco board has been chaired by an outside director.

Chang also changed the method to select the chairman of Posco, which had been largely influenced by political circles even after the once state-owned company became private. In the past, a committee consisting of three outside directors and one managing director gave a recommendation of multiple candidates to the board for a final pick. But since 2007, an independent committee of seven outside members nominates the chief executive of the company.

By Moon Ji-woong

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]