[Photo by Yonhap]
Kim Young-shub, former chief executive of LG CNS Co., who has been tapped as the new head of KT Corp., faces the challenge of overcoming the months-long management vacuum at South Korea’s major telecom operator amid stagnant growth.
KT posted 6.4 trillion won ($4.9 billion) in sales in the January-March period, up 2.6 percent from the same period a year ago but its operating profit plunged 22.4 percent to 486.1 billion won during the same period.
“Kim, based on his corporate management experience and expertise in information and communications technology (ICT), clearly presents a future vision for KT to grow as a global digital platform company in a rapidly changing environment,” said Yoon Jong-soo, chairman of KT’s board of directors. “Kim has also clearly proposed specific execution strategies to enhance corporate value in the mid- to long-term,” Yoon added.
His comments were made after KT’s recommendation committee named Kim as the final candidate for its next CEO, citing his expertise in the digital platform sector.
“He is the best candidate to lay the foundation for sustainable growth under the new KT management vision, lead change and innovation among employees, and build collaborative relationships with internal and external stakeholders,” Yoon said, emphasizing Kim’s strong determination to establish a solid management system and improve corporate culture.
The appointment will be finalized at a shareholders meeting later this month.
The approval is widely expected, given that the National Pension Service (NPS), KT’s largest shareholder, has been proposing the appointment of an external candidate.
The NPS holds an 8.27 percent stake in KT, followed by Hyundai Motor Group with 7.79 percent, and Shinhan Bank Co. with 5.57 percent.
Kim is known to be a personnel that believes that technology is the only asset for IT service companies in the era of the fourth industrial revolution.
When Kim took office as the CEO of LG CNS in 2015, he was dedicated to enhancing technological capabilities through talent evaluation.
He believes that as cloud services, artificial intelligence (AI), and big data are interconnected and IT integration services are on the rise, the market demand for customized services will increase, making it difficult for companies to survive without highly skilled IT professionals.
To address this, LG CNS introduced a technology competency level evaluation system for its employees.
From external IT experts to clients and internal employees, they were all required to take technology certification exams based on exam questions prepared by top experts in each field.
The final technology competency level was evaluated by comprehensively assessing industry-related and common competencies, and this level was reflected by 50 percent in salary increases.
This reflected the company‘s efforts to drive internal innovation through the cultivation of technological talent.
Kim, in the meantime, is expected to inherit KT’s years of new business initiatives.
In 2020, KT’s former CEO Ku Hyeon-mo actively promoted non-telecom businesses under the slogan DIGICO, a combination of digital and telecom, which signifies KT’s intention to become a digital platform company that encompasses AI, big data, and cloud, in addition to its existing telecommunications business.
The former CEO also indicated his ambition to increase the share of non-telecom sector revenues to more than half of the total.
However, KT has seen its investments in new business sectors slow down during the past year of a management vacuum.
During the tenure of former CEO Ku, there were 15 mergers and acquisitions worth about 2 trillion won over three years, including KT SkyLife Co.’s acquisition of Hyundai HCN Co. and Hyundai Media Co. for about 500 billion won.
However, since the departure of Ku in November last year, there has not been a single M&A case involving KT.
In particular, last year, KT invested 30 billion won in AI semiconductor company Rebellions Inc. and 130 billion won in cloud management service provider Megazone Cloud, but the drive into non-telecom businesses has come to a standstill.
KT’s satellite communications subsidiary, KT Sat Co., initiated investments in startups in the aerospace industry but halted them later.
Kim is also considered a financial expert who emphasizes corporate efficiency.
After graduating from Korea University majoring in business administration and joining Lucky Goldstar International Corp., now LX International Corp., Kim held various positions, including the head of the audit team at the LG Group Chairman’s Office, the head of the management team at LX International’s U.S. subsidiary, and the head of the financial improvement team at LG’s restructuring headquarters, before becoming the chief financial officer (CFO) of LG CNS in 2003.
He later moved to LG Uplus Corp. in 2014 to oversee the Business Management Office, then returned to LG CNS in 2015 to serve as CEO for seven years before recently stepping down due to the failure in establishing the social welfare system for the Ministry of Health and Welfare.
During his time at the helm, however, he led the company’s startup incubation, cloud, logistics, and digital transformation businesses, delivering several record quarterly earnings.
By Na Hyun-joon, Kim Dae-eun, and Yoon Yeon-hae
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]