Eugene Kim’s columns in The Korea Herald
Eugene Kim, Egon Zehnder's office leader in Seoul, is a regular contributor to The Korea Herald’s Management in Korea column. Eugene offers executive advice and insights into a wide variety of topics including how to foster and transition to a global corporate culture, harnessing the competitive advantages offered by diversity and strategies for boosting gender equality.
The following articles were originally published in The Korea Herald’s Management in Korea and are presented here with its permission.
Technological prowess is a key element of Korea’s economic identity. Samsung, LG and SK Group are global giants, and the country is considered a leader in innovation and connectivity. But these achievements are the result of conscious and sustained investments in education and industrial infrastructure that were made throughout the second half of the 20th century. We cannot assume that this success will automatically continue into the digital era, which requires a new set of competencies and business models. And indeed, Korean business leaders on the front line of global competition are concerned when they look into the future.
Being named CEO is a goal sought by many but obtained by few. Both in the public eye and within the executive suite, it is thought of as the end of a long career path. But the fact is that it is only the beginning of a new and more challenging stage. Even for executives who have been carefully groomed for the role, being CEO is unlike any experience they have ever had before.
Female leadership roles are limited due to South Korea’s paternalistic culture, gender division, and a glass ceiling that still exists in every corner of society. Companies are very much male-dominated in ways that encourage men’s leadership and work styles in which female leaders are pressured to replicate. With government driving diversity-focused policies this should propel organizations to bring about more opportunities.
Family is central to the idea of chaebol, which literally means “money clan.” Yet the fact that chaebol are family businesses has helped them resist adopting governance practices that have become standard in the developing world. Somehow, because they are family businesses, it does not seem realistic to hold chaebol to the same professional standards that we readily apply to a non-family enterprise.
The role of the board of directors is rapidly evolving in Western countries. No longer rubber stamps hand-picked by CEOs, Western boards are now expected to provide true oversight of management, not just in terms of maximizing shareholder value, but in grappling with broader issues like innovation and globalization.
For decades, corporate boards around the world could best be described as “seen but not heard.” While directors were supposed to oversee the CEO and the management team on behalf of shareholders, since the CEO effectively hand-picked them, most boards were little more than a rubber stamp.
Korean companies historically have been reluctant to recruit from the outside. Increasingly, however, they are hiring external talent, particularly when they need to quickly expand in a critical area.
Given that Korea’s population is only about 50 million, the country’s largest companies have long understood that their ambitions could only be reached by developing into truly global organizations. And many Korean enterprises have done exactly this. Not just the most well-known chaebol like Samsung, Hyundai-Kia and LG, but many organizations in the top tier of Korean corporations have substantial operations around the world.
Each year since 2015, Egon Zehnder has held a global event series, Leaders & Daughters, which brings together senior executives of both genders, and their daughters, for frank discussion of the opportunities and challenges facing current and future female executives.
The persistent gender imbalance among Korea’s business leaders is well known. According to one recent study, only 2.4 percent of the executives of publicly listed Korean companies are women, compared with 12.4 percent for the Asia-Pacific region. And in Egon Zehnder’s 2016 Global Board Diversity Analysis, only 20 percent of the Korean companies examined had at least one female board member—the second-lowest percentage of the 44 countries in the study.
As advisers on leadership and leadership issues, there is one story we’ve seen unfold time and again in Korea: An executive builds up a solid track record over 20 years of meeting deadlines, exceeding goals and assuming positions of greater and greater responsibility. Furthermore, he or she has a sterling reputation for personal reliability and loyalty, and is thus poised to ascend into the upper ranks of management.
More and more, executives are being asked not to merely lead enterprises, but to transform them -- to develop and implement radically new ideas regarding how the organization creates value, manages operations and fits into the larger economic landscape.
Chaebol — or “money clan” — are called that for a reason: The businesses are inseparable from the families that founded them. Although this arrangement is common in Korea, it actually suggests that Korean businesses are stunted in their development and have been unable to move to the next level of their potential.
The recent ouster of Cho Yang-ho from the board of Korean Air, shortly before his death and after a series of leadership shortcomings including alleged misuse of company funds, is more than a turning point for one of Korea’s most visible companies.
Chaebol played a critical role in South Korea’s recovery after the Korean War and then in enabling the nation to become an economic powerhouse. But to remain competitive in today’s environment, it is essential for Korea to also have vibrant small and midsized businesses to drive innovation and develop new and disruptive business models.
The series of corruption scandals running through these conglomerates is why South Koreans have been pushing for chaebol reforms for years. While the government has promised reforms, it has yet to happen.
Teaching leadership in a class or even a seminar to executives is like trying to learn martial arts by reading a book or watching YouTube. It cannot be taught by relaying information – development is involved which needs to be initiated from the leader himself/herself. One needs to want it and willing to act on it and make the necessary changes. Which is an area, Korean executives lack so much as signs of vulnerability can be seen as a weak leader. Corporate setting needs to change where companies allow executives to have courage and commitment on developing themselves.
Eugene Kim is the leader of Egon Zehnder’s Seoul office. He has spent his career advising some of the largest Korean conglomerates and world-leading multinational corporations on CEO succession and talent strategy…..Korean executives are very strong in result orientation yet extremely weak in collaboration and influencing….