The first CEO Succession held successfully on April 23rd discussing the future and rightful candidates

Discussion for future POSCO and rightful candidates

The five outside directors, including Joo-hyeon Kim, chairman of the Board of Directors, Byeong-won Park, chairman of the director recommendation committee and the steering committee, Moon-gi Jeong, chairman of the auditing committee, Myeong-woo Lee, chairman of the evaluation and compensation committee, and Shin-bae Kim, chairman of the financial and inside trading committee and Ohjoon Kwon, CEO of the POSCO attended at the Council meeting.

CEO Ohjoon Kwon, not to participate in the Succession Council for transparency.

Based on regulation, the current CEO is considered as an ex-officio member of the CEO Succession Council. However, as soon as the Council meeting started, CEO Kwon has announced that he would not participate in the Council meeting for ensuring fairness and objectivity for the procedure of candidate identification.

Various candidates will be considered from in and outside

According to the outside directors, they defined the competent CEO candidates as the one who can show ‘Innovative leadership that can lead the next 100 years of POSCO Group’. More specifically, this means that they would carefully recommend the candidates who have global management aptitude to respond to the changes in the global economy, the innovative capabilities to continuously implement the development and changes of the group, and a high level of understanding of and competency in the steel, infrastructure and new- growth industries.

As for the election method for CEO candidates, insiders who have been fostered through the internal core talent development system will be recommended. However, shareholders such as the National Pension Service and institutional investors, through the labor-management council and Association of POSCO’s former executives will provide recommendation for the outsiders. Also, POSCO opens for global CEO candidates recommended by external search firms.

BOD Chairman Joo-hyeon Kim has been an outside director of POSCO since 2015. He previously served as president of the Hyundai Research Institute and chairman of the Economic Subcommittee of the Presidential Committee for Unification Preparation.  He is currently the CEO of Financial News. He Seong-jin Kim, is an expert in industrial policies. He was the Deputy Director-General of Industry in the Prime Minister’s Office, a presidential secretary for policy management, a presidential secretary for industrial policies, the administrator of the Small and Medium Business Administration, the Minister of Maritime Affairs and Fisheries, and president of Hankyong National University.  

CEO & President In-hwa Jang served as the head of multiple organizations, including the New Business Management Office of POSCO, the Steel Solution Marketing Office. and the Technology Investment Headquarters. He was also appointed as head of the Steel Production Headquarters last year, and oversaw steel production sites.

Joong-seon Jeon, served as head of the Raw Materials Purchasing Office of POSCO, head of the Management Strategy Office, and CEO of POSCO C&C. He was promoted to vice-president last month after being appointed as head of Corporate Strategy & Finance Center The shareholders approved the financial statements, reorganized expert committees and revised part of the Articles of Incorporation, including the increase of the number of outside directors.

POSCO CEO Ohjoon Kwon remarked at the general shareholders’ meeting, “POSCO celebrates its 50th anniversary this year. To make a new leap forward in 2018, we will further consolidate our world-leading position in the steel industry, reshuffle our business strategy by with a focusing on high-yield core businesses, converge create convergence businesses with group affiliates, and continuously seeking new business opportunities for our future growth.”

In addition, POSCO is planning to operate the CEO candidates nurturing program more substantially. This program establishes plans for individuals who were selected through an objective verification process from general managers and higher-ranking officials at POSCO and its affiliates, and nurtures them in a customized way. 100 people have benefitted from this program each year since March 2016. Program participants work for companies that POSCO invested in and for its overseas subsidiaries, while participating in leading domestic and overseas universities’ business management courses to foster their entrepreneurial competency and global mindset.

Meanwhile, to repay the country and citizens for their continued support for POSCO since 1968, the business announced that they are planning to construct the Science and Technology Experience Center and the Cultural Complex as part of their activities to celebrate POSCO’s 50th anniversary.

Cover photo courtesy of News World.

Being in a global leadership position is not new to CEO Kwon. He served as the chairman of worldsteel’s Technical Subcommittee since 2012, when he was president of POSCO, and since 2014, he served as a member of the executive committee, the highest decision-making body of the organization, when he was inaugurated as the CEO of POSCO.

The new leadership will be looked upon to invigorate technical exchanges among steelmakers around the world, and boost the advancement of technology in the steel industry. In particular, while countries around the world are strengthening protectionism due to global oversupply, worldsteel’s leadership will be counted on to coordinate and arbitrate the interests of steelmakers through effective communication and networking.

The news of CEO Kwon’s new leadership role comes a day after POSCO received worldsteel’s Steelie Award for “Innovation of the Year.” The Innovation of the Year award is given to one member of worldsteel who made the most innovative accomplishments in technology or sustainability. POSCO was recognized for its use of artificial intelligence (AI) in coating weight control, the cold rolling process, automated operation and the furnace heat control process to improve quality and reduce costs at the same time.

This year’s award marks the last of 4 awards POSCO has received from worldsteel including the award for sustainability in 2010, and the awards for Innovation in 2012 and 2015.

Cover photo courtesy of World Steel Association.

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POSCO invested a total of KRW 255.4 billion and the 7CGL is expected to have an annual production capacity of 500,000 tons. By designing and constructing the plant with its own proprietary technology, POSCO was able to reduce construction costs, thereby securing cost competitiveness for its customers as well.

POSCO CEO Ohjoon Kwon and executives came together on April 26 to officially bring 7CGL online. From left to right: Seong Yu, head of the Technology and Investment Division; Shohei Yamazaki, purchasing organizing director of Renault-Nissan; Kiyoshi Kamishima, general manager of the Materials & Facilities Purchasing Division of Toyota; Jae-cheon Song, chairman of the Gwangyang City Council; In-hwa Jeong, a national assembly member; CEO Kwon; Nak-yeon Lee, governor of Jeollanam-do; Hyun-bok Jeong, mayor of Gwangyang; and Myeong-jin Seo, executive director of Hyundai & Kia.

CEO Kwon remarked, “POSCO opens up a new horizon in automotive steel with the completion of the 7CGL. This new line will allow POSCO to continue to provide differentiated products and customized solutions through smart technology.”

The 7CGL is attracting attention as one of the first plants to produce both hot-dip galvannealed (GA) and hot-dip galvanized steel (GI) at 1.5GPa  steel for automobiles. GA steel is preferred by Korean and Japanese automakers because it has excellent coatability and weldability as the coating layer is made of iron and zinc alloy, while GI steel is preferred by European automakers due to its excellent resistance to corrosion.

Previously, GA and GI steel sheets could only be produced at 1.2GPa due to surface and quality problems that occur before and after plating. POSCO resolved these problems by developing the “high hydrogen rapid cooling technology,” which forms high-intensity tissues in steel sheets before plating, and a “rapid cooling system,” which uses rapid cooling to smooth out the plated surface.

With the completion of 7CGL, POSCO now has seven operating CGLs  in Gwangyang, two CGLs in Mexico, and five CGLs in Thailand, India, and China. Through these CGLs, POSCO plans to produce 10 million tons of steel by 2018 and further solidify its status as a global automotive steel maker.

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More than 290 people attended the presentation ceremony, including Ohjoon Kwon, chairman of the POSCO TJ Park Foundation; Chang-hee Kang, former chairman of the National Assembly; Hong-goo Lee and Deok-soo Han, former prime ministers of Korea; Gong-il Sa, chairman of the Institute for Global Economics; Nak-in Sung, president of Seoul National University; and prize winners from previous years.

Ohjoon Kwon, POSCO CEO and chairman of the POSCO TJ Park Foundation, said, “For the past 10 years, the POSCO TJ Park Prize has been a way to recognize those who tackle the never-ending challenges of today’s world. In the next 10 years, we aim to make the POSCO TJ Park Prize an even more noteworthy honor.”

This year, the POSCO TJ Park Prize was awarded to the following honorees:

• Excellence in Science: Prof. Jong-heun Lee, Department of Materials Science and Engineering at Korea University
• Excellence in Education: Attached Middle School at Kyungpook National University
• Excellence in Community Development & Philanthropy: Jimmy Pham of Vietnam, CEO of KOTO
• Excellence in Technology: Myeong-hwan Kim, head of the Battery Research Institute at LG Chem.

POSCO CEO Ohjoon Kwon (far right) stands with recipients of the POSCO TJ Park Prize. The award recognized their noteworthy achievements in science, education, community development, and technology.

The Excellence in Technology award was added this year to highlight how technology has contributed to the renewal of the Korean economy. Eligible candidates for this category include persons or organizations that contributed to national and global market development.

Prof. Jong-heun Lee of Korea University, winner of the TJ Park Science prize, was honored for his work on the oxide nano hierarchical structure in which nano building blocks are regularly self-assembled, and the p-type oxide semiconductor, which has a high level of catalytic activity that allows for gases to be detected quickly and selectively. His achievements are expected to be widely utilized in various areas such as safety, environment, medical science, and IoT.

Kyungpook National University Attached Middle School, winner of the Excellence in Education prize, was awarded for its model of creative public education. Unlike a typical learning environment, the middle school introduced project-based learning in 2012, which allowed students to switch roles with teachers and also collaborate with one another on a deeper level.

Jimmy Pham, winner of the Excellence in Community Development and Philanthropy prize, established KOTO (Know One, Teach One), the first social enterprise in Vietnam. For 17 years, the organization has been giving at-risk youth a chance to stand on their own by teaching various life-skill classes.

Myung-hwan Kim, head of the Battery Research Institute at LG Chem, received the foundation’s very first Excellence in Technology prize. Kim began to oversee battery R&D in 1996 when the secondary battery business was first starting to become active. Through much trial and error and over 20 years of experience in the field, Kim successfully developed the first lithium-ion battery for electric vehicles. He is considered to have greatly contributed to making Korea a leader in the secondary battery industry.

Chang-hee Kang, former chairman of the National Assembly, delivered a congratulatory address, saying, “I would like to thank POSCO for contributing not only to the development of science and technology, but also for actively recognizing scholars and citizens who made a great impact in their respective fields.”

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CEO Kwon of POSCO greets Chairman & CEO Jeffrey Immelt of GE to discuss ways to integrate GE’s smart factory solutions into POSCO’s steel and non-steel factories

In late February, Kwon made trips to Germany and the US to visit Siemens and GE factories. He met with executives to discuss best practices and share thoughts on potential collaborations. At that time, Kwon and Immelt were not able to meet so they took advantage of Immelt’s time in Korea for a face-to-face meeting.

Kwon and Immelt discussed different ways that smart technologies could be incorporated into POSCO’s steel and non-steel factories. By combining GE’s strength in equipment manufacturing and POSCO’s expertise in the steel industry they hope to create more advanced smart industrial solutions. POSCO, in particular, was looking to introduce smart features to their material, energy, and construction businesses through this partnership.

Executives from POSCO, including CEO Ohjoon Kwon, discuss smart factory solutions with GE Chairman & CEO Jeffrey Immelt

After meeting with Immelt, Kwon left for Indonesia to attend the Korea-Indonesia Economic Development Forum in Jakarta. Kwon also visited PT Krakatau POSCO, located in Cilegon, and encouraged field employees to continue their hard work to strengthen their competitiveness in the region.

PT Krakatau POSCO is POSCO’s first overseas integrated steel mill and is capable of producing a total capacity of 3 million tons. Since 2013, it has cut down on operating losses and increased its competitiveness through innovative cost-reduction activities and new technology integration.

Last year, the overseas steel business division’s operating profit reached KRW 218.2 billion, up by KRW 648.1 billion from 2015. This is a result of increased sales of high-margin products and intentional efforts to cut costs.

POSCO plans to focus on strengthening its financial structure by increasing the sales of its World Premium Products. Through this effort, they hope to continuously expand their presence in overseas steelmaking while optimizing the process of locally sourcing product materials.

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The recognition ceremony was hosted by the Korean Academic Society of Business Administration and Maeil Business News on October 18 at the Shilla Hotel in Seoul. It took place as a tribute to the distinguished services rendered by various enterprises and entrepreneurs that served as the driving force behind Korea, helping the country become one of the top 10 economic powers of the world.

In the enterprise category, the elected companies included: Samsung Electronics, CJ Cheil Jedang, Amore Pacific, SK Telecom, LG Chem, Hyundai Motor Company as well as POSCO. People who were inducted into the entrepreneur category included: Taejoon Park (the honorary chairman of POSCO), Inhoe Koo, Kunhee Lee, Byungchul Lee, Mongkoo Chung, Juyung Chung and Jonghyun Choi. Among the inductees, Taejoon Park is the only member who is not an enterprise owner-manager, making his achievement a unique and remarkable one.

At a time when POSCO lacked experience and technological means, Park, armed only with the conviction that “Steel is the rice of industry, and that we must make the country rich by making cheap quality steel,” erected the integrated steel mill at Yeongil bay of Pohang, which was a wasteland at the time. Living up to his motto of “I shall dedicate my short life to the eternal fatherland,” he transformed POSCO into a steel mill in 1992 that produced 21 million tons a year. Just 25 years later, he created a stable steel supply system.

Thanks to POSCO, steel-consuming industries such as the automobile, shipbuilding and construction industries, secured superior quality and cost competitiveness to become the leading enterprises of today. One story often told in Korea in industry circles involves the Chinese Community leader Deng Xiaoping. He visited the Nippon Steel Corporation in Japan in 1978 and asked the company’s chairman Yoshihiro Inayama to build a steel plant in China similar to POSCO’s. In response, the Nippon Steel chairman told Deng that “it won’t do you any good unless China has a manager as good as Taejoon Park to run it.”

This anecdote gives us an idea of Taejoon Park’s success story and his reputation as an indomitable driving force. Through his vision and dedication, the honorary chairman spearheaded POSCO’s transformation into the world’s most competitive steelmaker, and laid the foundation for Korea to become a powerhouse in the heavy and chemical industries.

POSCO and its honorary chairman Taejoon Park were elected into the ‘Korean Business Hall of Fame in the entrepreneur and enterprise categories at a ceremony held on October18 at the Shilla Hotel in Seoul. From the left, Changjo You (chairman of the Korean Academic Society of Business Administration), Daehwan Jang (chairman of Maekyung Media Group), Taehee Woo (vice minister of Trade, Commerce & Energy) and Eunyeong Hwang (the CEO of POSCO) can be seen posing for a picture at the ceremony.

“It was the entrepreneurship and can-do spirit of the founders, including the honorary chairman Taejoon Park, that made POSCO the most competitive steelmaker in the world,” said Professor Jinbae Kim of Korea University, who presented POSCO at the ceremony that day. “I sincerely hope that POSCO employees will do their best to enable the company to maintain its status as the best steelmaker in the world by taking in this spirit of entrepreneurship and engraving it in their DNA.”

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